CoreLogic estimates of monthly settled sales data points to a levelling in housing market activity, following several years of falling home sales according to research by analyst Cameron Kusher. Despite signs that market activity is leveling out, annual transaction numbers remain lower year on year across every capital city region of the country.
Annually, transaction volumes continued to decline, however, recent monthly data indicates that transaction volumes may have stabilised. Cameron Kusher said, “The decline in home sales has taken market activity to similar levels as what was recorded during the previous downturns in 2008-09 and 2011-12.”
(Note: Estimates of settled sales do not account for unsettled sales, such as off-the-plan properties, which are yet to settle. Off-the-plan sales are not counted until settlement and those sales are included within the historical series with each month’s revision based on the contract date. Given the large volume of offthe-plan sales over recent years, this will lead to some upwards revision of sales volumes over recent years.)
Nationally, an estimated 412,154 settled dwelling sales occurred over the past 12 months which was – 17.5% fewer than the previous year. Although sales volumes are lower on an annual basis, monthly sales volumes have risen from recent lows and although market activity is lower than a year ago, the number of sales is relatively unchanged over recent months.
Sydney recorded an estimated 82,427 settled sales over the 12 months to June 2019; -21.9% fewer than the previous year and well down on the decade average. While annual sales are significantly lower, the chart highlights that on a six-month trend basis, sales volumes have started to increase slightly but are sitting at a level close to what was recorded in the 2008-09 downturn. “With an unprecedented volume of off-the-plan unit stock under construction and already under contract, there will inevitably be some revision to these figures over coming years,” says Kusher.
The six-month trend for Melbourne shows that the estimated number of sales trended slightly higher over recent months. Notwithstanding the recent improvement in transaction volumes, market activity has fallen to levels similar to those during the 2011-12 housing downturn. Annually there were an estimated 64,546 settled sales over the past year which was -27.0% lower than over the previous year.
Unlike Sydney and Melbourne, there is little evidence as yet to indicate that transaction volumes in Brisbane may be stabilising. Transaction volumes continue to trend lower on a monthly basis and, although they are similar levels to those in 2008-09 they are not yet as low as volumes were during 2011-12 downturn. Over the past year there were an estimated 39,641 settled sales across Brisbane which was -13.4% lower than annual sales over the previous year…
Kusher said, “Across most cities there are some tentative signs that sales volumes may have bottomed. With two 25 basis point cuts to interest rates and lenders now lowering their serviceability buffers, access to finance is easing somewhat and borrowing power is increasing which should support a further increase in transaction volumes.”
“One of the challenges for the market at the moment is historically low volumes of new properties entering the market for sale which is contributing to the low volume of sales. We anticipate that come Spring, new listings will increase which should lead to more transaction activity.
“The challenge for vendors will be whether or not a potential pick-up in listings is accompanied by a commensurate pick-up in buyers in the market. While some restrictions on credit have been removed, accessing finance is still much more difficult than it has been in the past so demand could still be fickle over the coming months.”
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
