Total Australian Home Value Over $ 9 Trillion, Up $ 1 Trillion in Five Months

According to real estate researcher Core Logic, the value of the Australian housing market exceeded $ 9 trillion (US $ 6.6 trillion) in September, just five months after reaching $ 8 trillion (US $ 5.8 trillion). ..

House prices have risen 20.3% in 12 months since the Reserve Bank of Australia lowered the discount rate to 0.1% in November 2020, and the federal government has provided buyers with many financial support schemes.

“This makes home prices about 28.2 percent higher than the combined estimate of aging, ASX (Australian Security Exchange), and commercial real estate,” said CoreLogic’s chief investigator. Eliza Owen said..

Australia’s average home price reached $ 719,209 (US $ 525,000) in September, while the average unit was $ 586,993 (US $ 429,000).

March was the peak month for housing growth of 2.8%, then slowed down due to affordable price issues. The market has grown at a stable 1.5% for the second straight month.

“Affordability is an increasingly big challenge for many segments of the market, especially for the first homebuyers who do not benefit from homeownership as a source of wealth through equity generation,” Owen said. I did.

Epoch Times Photo
The auctioneer counts down bids during a home auction in Sydney, Australia on May 8, 2021. (LisaMaree Williams / Getty Images)

Due to the low cost of borrowing and the rising value of homes, the Australian Prudential Regulation Authority (APRA) said more than one-fifth of the newly approved loans in the June quarter were six times the borrower’s income. I found that it was over.

Therefore, industry regulators made the first move on Wednesday to cool the market and address rising levels of household debt.

Lenders are expected to increase the maintainability buffer used by borrowers to assess their ability to repay loans from 2.5% to 3%.

According to APRA calculations, this is expected to reduce the maximum borrowing capacity of a typical borrower by approximately 5%.

Increasing the maintainability buffer was considered the most appropriate move because it is relatively easy to implement and does not affect existing loans.

“The further tightening of the conservative buffer announced by APRA this week is a subtle approach to financial stability and is far less likely to move the housing market into the negative territory,” Owens said.

Treasury Secretary Josh Frydenberg was also pleased with APRA’s decision, saying it would have a greater impact on investors than homeowners, which are currently the main drivers of the market.

“We welcomed this move by cautious regulators. We think it’s targeted. I think it’s wise.” Frydenberg told Sunrise..

Rebecca Chu