Australian house prices have hit a record quarterly increase as transaction levels continue to rise across Australia. The latest ABS figures suggest house prices increased 6.7% in the June Quarter, which was the fastest pace of quarterly growth in 18 years.

ABS head of price statistics Michelle Marquardt says persistently low levels of stock on the market and strong demand is driving prices up.

The total value of Australia’s 10.7 million residential dwellings increased by $596.4 billion to $8.9 trillion in the June Quarter – the largest quarterly rise since ABS began the series in 2003.

CoreLogic figures reveal house prices nationally increased 18.4% in the 12 months to August.

RBA assistant governor for economics Luci Ellis told the Federal Government Inquiry into housing affordability that a lack of supply was driving up prices. “You don’t increase affordability by giving people more money to spend on housing,” Ellis says. “All that does is bid up prices.”