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Australian residential property value soars to $11 trillion record

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The total value of Australia’s residential real estate has reached an unprecedented $11 trillion, according to CoreLogic’s Monthly Housing Chart Pack for October.

This figure represents a $900 billion increase over the past 12 months.

Despite this significant growth, national home values rose by only 1 per cent during the September quarter, marking the weakest quarterly increase since March 2023.

The annual pace of growth in dwelling values also slowed to 6.7 per cent, down from the recent high of 9.7 per cent recorded over the 12 months to March of this year.

CoreLogic Australia economist Kaytlin Ezzy attributed the reduction in price growth to a rise in property listings and increasingly cautious behaviour among buyers.

“While the market remains resilient in many areas, the pace of growth more broadly has clearly decelerated. Buyers and investors are becoming more cautious, and the current lending environment is leading to more measured purchasing decisions,” she said.

Perth’s dwelling values reached a record high, with the city recording the largest annual growth of all capitals at 24.1 per cent, which CoreLogic attributed to consistent demand and limited supply.

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Adelaide’s values also hit a new record level, rising by 14.8 per cent over the year.

Brisbane and Sydney both achieved new record highs, with annual growth rates of 14.5 per cent and 4.5 per cent respectively.

In contrast, dwelling values in Melbourne and Hobart fell over the year by 1.4 per cent and 1.1 per cent respectively.

New listing volumes increased significantly over the quarter, with a 2.1 per cent rise to 42,479 new listings recorded over the four weeks to 6 October.

Total sales volumes slightly decreased from the previous 12 months, with CoreLogic estimating 522,317 sales in the 12 months to September, down from 524,442 over the year to August.

Ezzy explained that the year-on-year increase in new listing volumes contributed to a deceleration in value growth as the market absorbed the additional stock.

Investors made up a significant proportion of buyer demand over the quarter, comprising 38.6 per cent of new loan commitments, the highest portion since 2017.

This increased investor activity occurred as national rental growth stalled, with the 0.1 per cent quarterly rent increase marking the lowest rate in four years.

Gross rental yields contracted to 3.68 per cent, down from 4.1 per cent a year earlier, signalling affordability constraints for tenants.

Ezzy said the increased investor activity likely stemmed from a combination of factors, including “perceived opportunities for capital gains and tighter rental market conditions driving potential yield growth”.

She warned that this trend may place further pressure on capital city markets with already limited supply levels and could “intensify competition for other buyer groups, such as first home buyers who remain active in the market”.

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