The total value of Australia's inflated property market has surpassed $9 trillion, according to the latest Australian Bureau of Statistics (ABS) figures, rounding out an unprecedented year of supercharged price growth locally and across global markets.
Figures released on Tuesday show the value of the country's 10.7 million residential dwellings rose by $487 billion to $9,259 billion in the September quarter.
The average price of a residential dwelling in Australia also rose again this quarter.
It now sits at $863,700, climbing from the $821,700 average recorded in the June quarter 2021.
Michelle Marquardt, head of prices statistics at the ABS, said the value of Australia's dwelling stock has risen by nearly $1 trillion in the past six months.
By comparison, the previous increase of just over $1 trillion took 15 months, Marquardt noted, rising from $7.2 trillion in the December quarter in 2019 to $8.4 trillion in the March quarter this year.
NSW accounted for 40% of the country's total dwelling value, a total of $3.7 trillion.
The average price of a residential dwelling in NSW rose to a record level of $1.1 million.
Across the board, Australian capital cities recorded rises in residential property prices over the past 12 months.
"The September quarter results were consistent with housing market conditions," Marquardt said, attributing continued solid growth in residential property prices to "record low interest rates, strong demand and low levels of stock on the market".
The figures follow a year of unprecedented price surges for the Australian property market.
Australian residential property prices rose 21.7% over the past year, a factor that has also accelerated a growing gap between wages and property prices.
Analysis by CoreLogic released in November exposed this gap, revealing that while wages increased 81.7% in the past 20 years, Australian home values have shot up by over 193%.
But the Australian market is not an outlier; global home prices surged at the fastest pace in four decades through the first quarter of 2021, according to JPMorgan economists.
Shortages and fervent demand drove home inflation higher in Australia, New Zealand, Brazil, Germany, Korea, and Turkey, among others.
In response to runaway prices - and a wider conversation among regulators, banks, and state and federal governments around how to address the growing unaffordability of housing - the government launched an inquiry into housing affordability and supply in September.
The Standing Committee on Tax and Revenue for an inquiry into housing affordability and supply will examine the tax, regulation and supply issues driving skyrocketing price growth.
So far, the inquiry has exposed the awareness across banking and government of the impact of growing unaffordability in the housing market.
Speaking before the parliamentary committee on November 15, RBA assistant governor Luci Ellis said that currently the most realistic way for many Australians to enter the housing market was through their parents.
While some economists have suggested property prices will continue to surge, Australia's big four banks have aligned in predicting house prices will hit a ceiling in 2022 before simmering into a correction period in 2023.
After the Reserve Bank of Australia begins its tightening cycle, the Commonwealth Bank of Australia forecast the cash rate could lift to 1.25% by the third quarter of 2023, which could trigger an "orderly correction" of house prices by as much as 10%.
Gareth Aird, head of economics at CBA, said in November that at some point the tailwind of lower mortgage rates on prices will seize up unless there are further cuts in interest rates.
"The Australian housing market is in the twilight of an incredible boom that has been fuelled by record low mortgage rates," Aird said.
"The phenomenal lift in prices is not over yet given dwelling prices are still rising briskly in most capital cities. But near term indicators of momentum coupled with the recent move higher in fixed rate mortgages suggest that conditions will moderate from here."
House prices rose 5.7% while attached dwelling prices rose 3.1%, the figures showed, with the largest price increases occurring in Sydney and Hobart.
Hobart and Sydney's house prices surged by 25.7% and 25.4% respectively, with both markets experiencing their largest annual rise since the ABS began its records.
Perth saw its largest annual rise in prices since the March quarter of 2007, with a 15.7% increase.
Brisbane and Adelaide saw price jumps of 19.7% and 19% respectively, the largest annual rise since 2008.
Melbourne and Darwin followed behind with 19.5% and 13.7% increases that marked the biggest annual price increase for both cities since 2010.
As of September this year, property accounted for around 39% of the average wealth per household.
Record house prices continued to drive household wealth, the ABS said in September, with residential property assets contributing 4.5 percentage points to the quarterly growth in household wealth in the June quarter of this year, followed by superannuation balances and directly held shares.
Katherine Keenan, head of finance and wealth at the ABS, said in September, "Growth in household wealth continued to be driven by residential property prices, which recorded the strongest quarterly growth on record."
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