The Real Estate Institute of Victoria (REIV) has released preliminary data on the overall number of home sales in Metropolitan Melbourne in calendar year 2012. According to the REIV, 69,000 homes were sold in 2012, which was nearly -3,000 less than 2011 and the lowest volume of sales since 1996 when 67,904 homes were sold across metropolitan Melbourne (see below chart).
The sales figures from the REIV are likely to concern the Victorian State Government, which has been hit hard by falling stamp duty receipts but forecast a partial recovery in stamp duty collections in 2012-13 in its most recent budget (see below chart).
With Melbourne property prices continuing to deflate, down -1.6% in the December quarter according to RP Data-Rismark, and sales volumes failing to rebound, it would appear that the Government’s forecast recovery in stamp duty receipts in 2012-13 is looking shaky.
The fall in overall sales volumes in Melbourne has also not been matched by a commensurate reduction in dwelling approvals across the city, as shown by the next chart:
While over all sales volumes are tracking at levels not seen since 1996, the annual number of dwelling approvals remains highly elevated, albeit below the peak level recorded in 2010.
The news is similar when new detached house sales are compared against house approvals, with the former falling far more sharply than the latter:
When combined with Melbourne’s elevated stock-on-market, this partial data suggests that the Melbourne housing market remains in oversupply, which should keep a lid on prices and rents in 2013.
