House prices across the country had their biggest quarterly increase in more than a decade through the first three months of 2021.
Data from the Australian Bureau of Statistics out this morning showed residential property prices jumped by 5.4 per cent, the biggest quarterly lift since the December quarter of 2009.
All cities reported an increase, led by Sydney (up by 6.1 per cent). Canberra prices jumped by 5.6 per cent, they were up by 5.2 per cent in Perth while in Melbourne they increased by 5.1 per cent. Adelaide and Brisbane prices rose by 4 per cent while they lifted by 4.7 per cent in Darwin.
Australia’s housing stock is now collectively worth $8.3 trillion. Credit:Peter Rae
The total value of the nation’s 10.6 million residential dwellings increased by $449.9 billion to $8.3 trillion. It is the single largest quarterly rise on record, and lifting the average price of a residential dwelling across the country to an all-time high of $779,000.
Some areas, though, are much more expensive.
The head of price statistics at the ABS, Michelle Marquardt, said NSW accounted for 40 per cent of the value of residential dwellings.
“The average price of residential dwellings in NSW rose to $1.01 million. This was the first time any state or territory had seen the average price of dwellings rise above $1 million,” she said.
The data came out as special research led by UNSW found the national economy was less stable and suffering from a drop in productivity due to runaway house prices. It found the lift in prices was diverting money away from more productive pursuits and affecting the lending policies of the nation’s major banks.
On an annual basis, national property prices lifted by 7.5 per cent. The biggest increase was in Canberra (by 10.9 per cent), followed by Hobart (10.2 per cent) and Perth (9 per cent).
Sydney prices have climbed by 8 per cent over the past 12 months while in Melbourne they are up by 5.9 per cent.
A rise in investors jumping back into the housing market was noted by the Reserve Bank of Australia in board meeting minutes for June released on Tuesday morning.
“Housing credit growth had increased, with ongoing strong demand from owner-occupiers, especially first-home buyers,” the minutes said.
“Growth in borrowing by investors had also started to increase in recent months, from low levels.“
Acknowledging house prices had continued to rise in all major markets, the central bank board re-emphasized the need to maintain lending standards and careful monitoring of borrowing trends in an environment with strong housing demand, rising prices and low interest rates.
he residential construction sector recorded strong building activity over the March quarter, which the RBA expects will strengthen “despite historically low population growth” due to government incentives like HomeBuilder, low interest rates and high levels of approvals.