- 1 Aug, 2016

July 2016 Property Market Update

Auction rates for the month of July are holding strong across the nation, and the level of home construction has reached an all time high. Home values are rising in most capital cities, though at slower rates than previously recorded.

Auction Rates

Preliminary auction clearance rates are hovering around the 70% mark in capital cities. Melbourne and Sydney were the strongest at just above 72% and 75% respectively. Brisbane recorded an auction clearance rate of approximately 53% and Adelaide around 71%. Canberras rates were 68%, and Perth 42%.

Home Construction

According to the Australian Bureau of Statistics (ABS), building activity during the March 2016 quarter saw the construction of more than 50,000 dwellings begin 25,122 houses and 29,987 units. The number of units is a record high, whereas nationally home construction fell for the second consecutive quarter. However, on a state basis, house building increased in South Australia, Tasmania and the Northern Territory. New South Wales and Queensland recorded the highest rates of unit construction.

The number of home and unit completions dropped during the month, with 23,218 homes completed over the quarter, and 15,002 units. House completions fell across all states, whereas unit completions were lower in all states except New South Wales and South Australia.

Housing Data

CoreLogic reports that home values are continuing to rise in all capital cities across Australia, apart from Perth, Brisbane and Darwin. While month end values have remained relatively consistent, declines have been noted in Adelaide, Perth, Brisbane, Darwin and Canberra. Lets look at the data:

 

City All Dwellings Houses Units
Month End Value % Change Year on Year % Change Month on Month Month End Value % Change Year on Year % Change Month on Month Month End Value % Change Year on Year % Change Month on Month
Sydney 996.14 11.29 1.15 1079.06 10.97 0.95 734.06 12.80 2.13
Melbourne 803.29 11.52 0.77 852.42 12.15 0.80 528.38 6.14 0.49
Brisbane 528.37 5.27 – 0.11 544.93 5.57 -0.07 406.20 2.36 -0.54
Adelaide 467.52 2.15 -1.27 481.99 2.19 -1.19 346.21 1.69 -2.21
Perth 584.11 -4.66 -0.79 596.10 -4.59 -1.00 456.29 -5.53 2.23
Darwin 499.80 -1.12 -1.55 518.55 -0.14 -4.54 436.41 -4.85 12.62
Canberra 642.97 3.90 -1.11 668.42 4.05 -1.45 416.77 1.75 4.02
Hobart 356.86 6.15 1.81 360.20 5.73 1.90 328.19 10.35 0.99

Source: CoreLogic RP Data

Higher Priced Dwelling Sales

Sales of homes priced at over $2 million and above have increased. According to CoreLogic in June 2012 a total of 4,103 dwellings sold for at least $2 million, across 884 Australian suburbs. Over the 12-months to March 2016 the number of homes priced at least $2 million totalled 11,648 homes over 1,437 suburbs. The majority of these sales were in Sydney and Melbourne.

Dwelling Resale Values

CoreLogics released its latest Pain and Gain Property Report, which measures the profit or loss of sellers by comparing a propertys sales price to its purchase data, in late June, for the March quarter. According to the data, only 9.2% of Australian homes recorded a loss. More than one-third of homes sold at more than double their purchase price. The total value of homes sold that recorded a profit was $12.9 billion and the average profit.

The proportion of losses and gains in resale values for the March quarter are as follows:

Location Houses Units
% of Loss % of Gain % of Loss % of Gain
Sydney 2.2 97.8 1.9 98.1
Melbourne 2.4 97.6 11.7 88.3
Brisbane 5.3 94.7 14.1 85.9
Adelaide 8.9 91.1 10.1 89.9
Perth 14.8 85.2 23.2 76.8
Hobart 8.8 91.2 14.1 85.9
Darwin 18.8 81.2 26.6 73.4
Australian Capital Territory 2.2 97.8 21.8 78.2
National 7.9 92.1 12.4 87.6
Capital City 5.8 94.2 9.4 90.6

Source: CoreLogic RP Data

Homes that recorded a loss had an average ownership of 5.4 years, whereas those homes that made a profit had an average ownership of 10.1 years. Homes that sold for double their purchase price had an average ownership of 17.2 years.

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