CoreLogic reported a 7.0% rise in Australian dwelling values in the year to November, driven by strong growth across the major capital cities:
Source: CoreLogic
This rebound in dwelling values lifted the value of Australian real estate to a record high $10.3 trillion in November, dwarfing the $3.5 trillion value of superannuation, the $2.8 trillion value of Australian listed stocks, and the $1.3 trillion value of Australian commercial property:
Source: CoreLogic
Not surprisingly, the Australian Bureau of Statistics (ABS) reported that household wealth rose for the fourth consecutive quarter, up 2.3% ($339 billion) in the September quarter 2023 to be 7.0% ($998 billion) higher year-on-year:
Source: ABS
Mish Tan, ABS head of finance statistics, noted that “household wealth is supported by house prices which have continued to grow despite increases in interest rates”.
Indeed, residential land and dwellings contributed 1.7 percentage points to quarterly growth, according to the ABS.
House price growth has stalled following November’s rate hikes from the RBA, which appears to have already driven small falls in Melbourne and Sydney (pulling price growth lower nationally):
Several analysts, including respected SQM Research managing director Louis Christopher, have tipped either minimal price growth or falls for national dwelling prices in 2024:
Therefore, household wealth should grow more slowly in 2024.
