Real Estate Continues to Drive Australia’s Wealth, Despite Decreasing Returns
Residential property continues to hold a larger share of the country’s wealth compared to the stock market and superannuation funds combined, despite offering lower returns.
Australians are still predominantly investing their wealth in residential real estate, even though the returns are lower than those of the stock market.
In the September 2024 quarter, the value of residential dwellings increased by $156.3 billion (US$96.86 billion) to over $11 trillion.
This figure exceeds the combined value of the stock market ($3.3 trillion) and superannuation funds ($4.1 trillion).
More than half of a typical household’s wealth is tied up in housing, whether it’s their own home, an investment property, or both.
During this period, the number of residential dwellings increased by 53,100 to 11.2 million, with the average value going up by $9,300 to $985,900, a 4.9 percent rise.
Despite property offering a return of 8.3 percent last year when accounting for capital gains and rental income, shares on the Australian Stock Exchange (ASX) performed better, yielding 11.4 percent and surpassing 2023 by 7.5 percent.
