Homeowners celebrate, buyers despair. What's driving the $11 trillion housing boom?
The Australian Bureau of Statistics (ABS) recently released its latest data on the total value of dwellings for the June 2025 quarter.
While the figures confirm that property values continue to climb, the implications for housing affordability are significant.
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By continuing you agree to our Terms and Privacy Policy.For homeowners, the gains represent a boost in wealth.
But for would-be buyers, especially first home buyers, the numbers highlight just how much harder the goal of ownership has become.
The total value of dwellings keeps climbing
At the end of June 2025, the total value of dwellings across the country reached $11.564 trillion.
Of this, households owned $11.109 trillion, the first time this figure has breached $11 trillion, with non-households holding $12.7 billion.
Over the quarter, the value of dwellings rose 1.9 per cent, bringing the annual increase to 5.1 per cent.
While this is the fifth straight quarter of slowing annual growth, and the lowest pace since mid-2023, the underlying momentum remains. With more recent indicators from CoreLogic pointing to ongoing price growth, it's likely we'll see quarterly and annual growth rates lift again in the months ahead.
Notably, New South Wales continues to dominate, holding 38.1 per cent of the national value, followed by Victoria (23.5 per cent) and Queensland (19.3 per cent). Together, these three states make up over 80 per cent of the nation's dwelling value.
For buyers, the steady climb in dwelling values means affordability challenges are set to persist, as incomes are not keeping pace with property costs.
First home buyers, in particular, face higher barriers to entry despite recent government support. For existing owners, however, the increase strengthens household balance sheets and can deliver greater financial confidence, equity gains, and borrowing power.
Looking ahead, falling interest rates could add further momentum to demand, likely supporting ongoing price growth. While this may benefit owners, it risks compounding affordability pressures for buyers unless housing supply meaningfully improves.
Average prices show stark state differences
The national average dwelling price now sits at $1,016,700, up 1.4 per cent over the quarter and 3.5 per cent over the year. However, the story differs markedly by region.
Queensland (8.9 per cent), South Australia (8.7 per cent) and Western Australia (8.4 per cent) recorded the strongest annual increases.
By contrast, Victoria was flat, the ACT dipped 1.6 per cent, and the Northern Territory fell 2.5 per cent.
New South Wales remains the only state where the average dwelling price exceeds $1 million, at $1,256,200.
Meanwhile, Victoria's average sits at $909,100, Queensland at $977,300, and South Australia at $854,400.
Over the past five years, the national average dwelling price has surged 47.5 per cent. The biggest growth has occurred in Queensland (86.2 per cent), South Australia (82.8 per cent) and Western Australia (79.8 per cent).
By comparison, Victoria (21.4 per cent) and the Northern Territory (22.6 per cent) have seen relatively subdued gains.
This divergence shows that affordability pressures are much more acute in the fast-growing states.
As someone who watches this closely, I see two main forces underpinning these sustained increases in dwelling values. First, falling interest rates and rising buyer confidence have significantly boosted borrowing power and demand.
As Cotality head of research Eliza Owen puts it, "with rate reductions now flowing through to buyer demand and value growth, we expect stronger resale returns in the months ahead."
The early 2025 rate cuts were frankly a turning point, reigniting momentum in home values across the board. At the same time, low advertised supply has added fuel to the fire.
As Owen has noted, more buyers are competing over fewer listings, which has created a sellers' market and pushed values higher.
This imbalance between strong demand and tight supply remains a critical factor behind the ongoing growth in dwelling prices.
New housing supply isn't keeping up
The preliminary estimate for the number of dwellings nationally sits at 11,373,900, up 0.5 per cent over the quarter and 1.6 per cent over the year.
That equates to 173,800 new dwellings over 12 months, well below the government's Housing Accord target of 240,000 per year.
Even if these estimates are revised, supply is clearly failing to keep pace with population growth.
The ACT (2.1 per cent), Victoria (1.8 per cent) and Western Australia (1.6 per cent) recorded the strongest growth in stock, while the Northern Territory added just 0.8 per cent.
Encouragingly, falling interest rates and stabilising construction costs should support more new housing starts over the next few years.
However, any meaningful improvement in affordability from greater supply will take time.
Housing turnover is steady, but set to rise
The data also shows that 4.8 per cent of total housing stock transacted in the 12 months to June 2025 - in line with last year, but down from the peak of 6 per cent in late 2021.
This translates to a rough turnover cycle of 21 years nationally, though turnover varies widely by region.
Queensland leads with 5.6 per cent of its stock sold, while Tasmania (3.9 per cent) and the Northern Territory (4.0 per cent) recorded the lowest turnover. With sentiment improving, interest rates easing, and more support for first home buyers, turnover is likely to increase in the coming quarters.
What this means for affordability
The ongoing rise in dwelling values and prices represents a double-edged sword. For existing homeowners, it adds to household wealth and boosts confidence. But for those looking to buy, the gap between incomes and housing costs continues to widen.
With interest rates falling, sentiment on the up, stimulus for first home buyers and dwelling stock likely to respond more slowly than purchasing activity, I expect that housing turnover is likely to rise over the coming quarters.
A significant increase in available housing stock, typically seen in the December quarter, will be crucial to shifting the current market dynamics, which have favoured homeowners while leaving prospective buyers in a challenging position.
Originally published as Homeowners celebrate, buyers despair. What's driving the $11 trillion housing boom?
