MNI BRIEF: Aussie Housing Market Strengthens Over Mar Quarter

The total value of residential dwellings in Australia rose by AUD140.0 billion to AUD9.9 trillion over the March quarter, snapping the downward trend in prices recorded since the Reserve Bank of Australia began hiking rates in May 2022, according to the Australian Bureau of Statistics.

The strength of Australian house prices has shocked the Reserve, unexpectedly reducing the drag on household consumption factored into its models and raising the chance rates could move higher if strong house-price growth persists (see: MNI POLICY: House Price Strength Thwarts RBA Models). ABS data showed the total value of residential dwellings rose in all states and territories except Tasmania, Northern Territory and the Australian Capital Territory over Q1 (see chart).

Hidden PDF this morning more than 40% of Australian house and unit markets recorded double-digit rent increase over the past year, despite the pace of rent growth showing signs of easing (see chart). Rent is a major input into CPI calculations and a factor the RBA monitors closely (see: MNI POLICY: RBA Ponders How To Respond To Rent Inflation).