Australian housing values slowly deflate back to earth

By Leith van Onselen

The ABS on Tuesday released its property price data for the March quarter, which valued Australia’s dwelling stock owned by households at $6.56 trillion, whereas the total housing stock was valued at $6.27 trillion.

As shown below, the total value of Australia’s dwelling stock owned by households was 6.97 times employee incomes as at March, down from the peak of 7.76 times incomes in June 2017, whereas the total housing stock was valued at 7.30 times employee incomes, down from 8.13 times incomes in June 2017:

Similarly, the ratio of the dwelling stock owned by households against Australian GDP was 3.26 times as at March 2019, down from the peak of 3.66 times GDP in the June quarter of 2017, whereas the total housing stock was valued at 3.42 times GDP in the March quarter, down from 3.84 times GDP as at June 2017:

When divided by Australia’s estimated resident population, Australia’s dwelling stock owned by households was worth $247,603 per head of population in the March quarter, down from $270,911 in the June quarter of 2017 in real inflation-adjusted terms:

Thus, after five years of strong rises, Australian housing values have clearly retraced significantly against incomes, GDP and population growth.

Mortgage debt has also begun to retrace, falling slightly to 94.9% of household income in March from the record high 95.8% in the September quarter of 2017:

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