- Turnover levels in Australia’s housing market are falling, especially in the eastern capitals.
- Turnover is currently running below the average seen over the past decade, and is heading towards lows not seen since the GFC.
- Compared to the prior 12 months, settled sales in Sydney, Melbourne and Brisbane have fallen 13.5%, 12.9% and 12.1% respectively.
If the chart below is anything to go by, times are getting tougher for any individual, business or government that relies upon turnover in Australia’s housing market.
From CoreLogic, it shows the amount of settled housing transactions in Australia on a six-month moving average basis.
For clarity, CoreLogic says off-the-plan sales are not counted until completion, meaning there will be some upwards revision to recent sales volumes given the high volume of units currently under construction across the country.
Right now, and largely reflecting the housing market slowdown seen in Sydney and Melbourne over the past 12 months, not only are transaction volumes below the average seen over the past decade, they’re also moving back towards levels last seen during the global financial crisis.
“Nationally, 465,788 settled house and unit sales transacted over the 12 months to May 2018 with the annual number of settled sales 7.7% lower over the year,” says Cameron Kusher, research analyst at CoreLogic.
“The monthly data points to a declining trend in transactions with settled sales now sitting lower than the decade average.”
Explaining the decline in the national measure, CoreLogic says settled transactions fell heavily in Sydney, Melbourne and Brisbane — Australia’s largest housing markets — compared to the levels seen in the year to May 2017.
Over the past year, settled sales fell by 13.5% in Sydney, 12.9% in Melbourne and 12.1% in Brisbane.
They also slid by 7.4% in Hobart, 5.8% in Darwin and 10% in Darwin over the year compared to the prior 12 months.
Only Adelaide and Perth, at 2.5% and 1.% respectively, saw sales increase from 12 months earlier.
Given the likelihood the recent Sydney and Melbourne-led national price downturn will continue in the period ahead, Kusher say settled sales will probably fall further, creating challenging market conditions for those reliant upon turnover in the housing market.
“With dwelling values now falling and tighter credit conditions it is reasonable to anticipate that transaction volumes will continue to trend lower,” he says.
“Fewer sales means less turnover, which means less commission and less stamp duty revenue for state governments.”
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