CoreLogic research analyst Cameron Kusher paired annual settled sales data with dwelling counts over time to show that the proportion of total housing stock turnover on an annual basis.
Mr Kusher’s analysis found that over the 12 months to September 2017, just 5.0% of the national housing stock transacted; the lowest proportion of stock-turnover since April 2012 when it was at a historic low of 4.9% of stock transacted. Over the nine years of data available, an average of 5.5% of the national housing stock transacts in a given year.
Mr Kusher said, “Housing turnover is impacted by supply and demand factors. From the demand side of things, the contributors are the rate of population growth, growth in household incomes, levels of investor demand and accessibility to credit.
“From the supply side, the factors include the level of new housing construction and how much stock is actually available for sale at any given time. Other factors include the costs associated with buying and selling properties as well as government policies such as incentives for first home buyers.”
Across the states and territories, the trends are interesting:
- NSW: In Sydney, a historic low 4.7% of housing stock transacted over the past year and in regional NSW the figure was 5.9%. In each region, turnover has slowed.
- Vic: Historic low 4.4% of Melbourne housing stock turned-over throughout the past year compared to 4.9% of regional Vic stock. Both of the regions are seeing a fall in turnover.
- Qld: Stock turnover is well above record lows in Brisbane (5.8%) and regional Qld (5.8%). Brisbane turnover is only slightly below average (5.9%) while regional Qld turnover is at average levels.
- SA: Turnover is fairly steady in SA recorded at 5.7% in Adelaide and 5.8% in regional SA. In each region, turnover is slightly above long-term average levels.
- WA: After a large fall over recent years, turnover has stabilised at a record low in Perth (3.6%) and has increased slightly from record lows in regional WA (4.2%).
- Tas: In Hobart, 5.9% of housing stock sold last year compared to a long-term average of 5.4% annually and in regional Tas 6.1% of stock sold compared to a long-term average of 5.3%.
- NT: 4.2% of housing stock transacted over the past year in Darwin and 4.7% of stock in regional NT. There has been a significant fall in turnover across the state as dwelling values have fallen.
- ACT: Over the past year, 4.8% of housing stock sold which is a historic low level.
Mr Kusher said, “The figures are stark given just how little of the Australian housing market actually sells in any given year. A big driver of the low level of turnover over the past year has been relatively low levels of stock for sale, particularly in our largest capital cities and the high costs associated with stamp duty when buying a property.”
“The impost of stamp duty discourages turnover as we have recently seen with the removal of stamp duty for first time buyers under certain price thresholds in NSW and Vic. Once removed there has been a surge in housing finance commitments by first home buyers. The final consideration for the low turnover is the high cost of housing in Australia because the cost is high it is a significant consideration for households as to whether or not to purchase a property,” he said.
The combined capital cities are expected to see a surge in auction activity this week, with 3,451 homes scheduled to go under the hammer; this is an increase of 37 per cent when compared to last week’s final results which saw 2,519 properties taken to auction.
The last time volumes reached a similar level was the pre-Easter week ending the 9 April this year when final figures saw 3,517 auctions held across the capitals.
While these counts are preliminary, as the week progresses and results are collected, the number of homes taken to auction tends to revise up, which means that it’s likely this week will not only supersede April figures, but also surpass the peak in volumes recorded over the week ending 20 March 16 (3,540).
Melbourne is set to see the most notable increase in activity this week, with volumes expected to rise by 48 per cent on last week’s figures; with 1,846 Melbourne homes scheduled to go to auction, increasing from the 1,251 held last week. The highest volume of auctions on record for Melbourne was recorded over the week ending 29 Nov 15 (1,876), so this week may very well overtake that record.
Across Australia’s other largest capital city, Sydney volumes are set to increase to a lesser extent with 1,144 properties scheduled to go to auction this week, rising by 39 per cent from last week’s 823 auctions, making it the third busiest week for auctions for the city so far this year.
Across the remaining auction markets, activity is expected to fall across all of the smaller capital cities with the exception of Canberra where more auctions are scheduled this week.
Camberwell is the busiest individual suburb for auctions across the nation this week, with 27 residential homes set to go under the hammer, followed by Reservoir (25), South Yarra (23) and Craigieburn (22) all of which are in Victoria.
Summary of Last Week’s results
Last week, the final auction clearance rate across the combined capital cities fell to 64.7 per cent across 2,519 auctions, decreasing from the 67.1 per cent across a slightly higher 2,525 auctions the week prior. Compared to one year ago, the clearance rate was a significantly higher 78.1 per cent, while volumes were slightly higher (2,680).
Across Melbourne, auction volumes rose with 1,251 held, however final figures saw the clearance rate drop to 70.3 per cent, down from the week prior when 73.2 per cent of the 1,223 auctions cleared.
In Sydney, the final auction clearance rate fell to 61.3 per cent last week, from 63.3 per cent the previous week across a lower volume of auctions, with 823 auctions held across the city, decreasing from 928 the week prior.
Across the smaller auction markets, clearance rates improved in Brisbane and Tasmania, while Adelaide, Canberra and Perth all recorded lower clearance rates. Geelong was the best performing non-capital city region last week, with 68.8 per cent of the 44 auctions successful. However, the Hunter region was host to the highest number of auctions (49).