Residential property values reach five times GDP as house prices surge
Australia’s residential property market has reached a total value of $11.6 trillion, according to new data from the Australian Bureau of Statistics (ABS).
This figure, recorded for the June quarter, represents an increase of $213 billion since March and is now approximately five times the nation’s annual gross domestic product (GDP), which is projected to be between $2.58 trillion and $2.7 trillion in 2025.
The total value of residential dwellings now exceeds the combined market capitalisation of the top 50 companies listed on the ASX, including major firms such as Commonwealth Bank, BHP and NAB. Five years ago, the combined value of Australia’s residential dwellings stood at $7.25 trillion.
The rise in property values follows the Reserve Bank of Australia’s decision to cut interest rates earlier this year. Since the first of three rate reductions in February, demand for housing has intensified across many parts of the country.
Medium-sized cities such as Brisbane, Adelaide and Perth have seen the most significant growth, with dwelling prices in these areas nearly 10% higher than a year ago, according to PropTrack. In contrast, Sydney recorded a 3.66% increase, while Melbourne’s home values rose by 2.1% compared to August 2024.
“June quarter’s growth in the value of dwellings followed a 0.3% rise in the March quarter, with rises across all states and territories,” said Mish Tan, ABS head of finance statistics. “The total value of dwellings was 5.1% higher than a year ago.”
ABS lending data released in August indicates that much of the increased activity in the housing market is being driven by investors. The number of new loans to investors rose by 3.5% over the June quarter, while new loans to owner occupiers increased by just under 1%. Tan described lending activity as being at “relatively high levels.”
Looking ahead, demand from buyers is expected to rise further. “Buyer demand is expected to increase substantially once the federal government expands its Home Guarantee Scheme in October,” said James Algar, broker at Mortgage Choice. The scheme allows eligible first-home buyers to purchase properties with a 5% deposit and avoid lender’s mortgage insurance. The upcoming changes will remove salary limits and expand price caps for the scheme.
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