Yesterday, I showed how the recent uptick in Australian house prices had been weak compared to previous interest rate-cutting cycles, with national capital city house/dwelling prices experiencing little to no growth in values since the RBA first cut official interest rates in November 2011, according to both Residex and RP Data-Rismark.
Well, it appears that the weakness has also extended to housing transactions, with the number of housing transfers in Australia’s four biggest states – New South Wales, Victoria, Queensland and Western Australia – tracking well below decade ‘norms’, according to the various state government data (see below charts).
According to the latest available data, which varies in timeframe across states, the annual number of housing transfers were running some -10% below average levels in New South Wales, -13% below average in Victoria, -28% below average in Queensland, and -18% below average in Western Australia (see next chart).
PS: If anyone knows where I can obtain property transfer data for South Australia, Tasmania, the ACT, and NT, can you let me know?
unconventionaleconomist@hotmail.com
Rising prices on lower volumes is the new normal.
For now.
Rising median, so not rising prices.
“Rising prices on lower volumes is the new normal.”
Archie, this comment is silly.
Anyone invested in the sharemarket knows where this combination leads – down.
The land market may move slower than shares, but move it will, and not to the benefit of your employers.
Don’t Buy Now!
David interested in your thoughts on the following…..
Is there any reliable guide to the number of abodes not for sale but not being used somewhere?
Is there any reliable guide to the numbers of abodes being bought by foreigners or those on temporary resident visas students etc?
FIRB used to monitor this, right?
I can tell you that I have just called the FIRB and asked them straight out if there was any data they have indicating the volumes and trends of international investment into Australian Real estate.
I got a very arch woman who told me that there would be nothing other than what was on their website (I had already looked)
There is some in their last annual report – http://www.firb.gov.au/content/Publications/AnnualReports/2011-2012/03_Main_Points.asp
She said that if I wanted to submit an official request through their media liaison people I may be able to get something more – but it sounded like public servant speak for piss off.
Gunna,
Doesn’t look like they will be much help.
http://news.domain.com.au/domain/home-investor-centre/blogs/domain-investor-centre-blog/foreign-investment-dont-ask-dont-tell-dont-know-20121020-27yk7.html
@ Gunna 8.30am: The Census measured vacant dwellings and found a lot.
http://blog.id.com.au/2012/australian-census-2011/the-where-and-how-of-vacant-dwellings/
Also, Earthsharing used water consumption to measure actual MEL vacancies:
http://www.earthsharing.org.au/2012/06/20/over-90000-empty-houses-amidst-housing-crisis/
The blank you found in pursuing the FIRB for data is deliberate. Somebody thinks opaque markets equal free trade.
Think earthsharing link below tries to assess, as did a public housing NGO some years, finding significant numbers of empty properties.
Re. internatinal students, it’s my understanding that they and/or guardians i.e. parents are limited to new off the plan apartments e.g. why Melbourne has so many developments planned before students numbers plummeted.
I was living in Newport 3015 in 2010 and saw students moving out en masse, leaving empty digs but often no “for rent” signage, plus houses with mail boxes full of free local rags/RE ads (generally removed quickly by same RE property managers), plus the strategic parking of cars in driveways, auto lights going on in evenings etc.. (interesting what you see if one walks round same routes)
However, it is in the interest of Navitas, RE industry etc. to suggest that the numbers are higher than they actually are by conflating definitions e.g. onshore (re) enrolments (churning) vs new commencements (who then get counted in future enrolments when they extend etc.).
Ditto conflation of temp residents counted under NOM net overseas migration and described as “immigrants”.
Archie – on a like for like basis 2007 prices are the new norm. That’s 5 years of price stagflation.
Goodbye stamp duty.
Hello broad-based land tax.
Fingers crossed
Dr Putland has done the sums. End Payroll Tax, Stamp Duty, insurance taxes and the existing State Land Tax for an LVT: http://blog.lvrg.org.au/2012/12/if-land-tax-replaced-payrollproperty.html
Transaction volumes would soar, as would overall economic activity. A bargain.
Victoria is not going to have any choice if things continue as is.
How Can AFG write a record number of mortgages with house transfer numbers at these levels?
More new builds, less existing sales?
But reading on:
“Last week’s new home sales data, released by the Housing Industry Association, showed that new detached house sales hit fresh 16-year lows in annual terms in all mainland states, except Western Australia”
So less new builds of existing houses, less selling of existing houses but still record mortgage numbers?
Something is moving that is not new houses or existing houses.
I would suggest that the two likely contributors are:
- AFG’s market share has grown (10% is clearly a rough estimate, it may have grown from 8% to 11% in the last few years, for all we know)
- Refinancing portion growing (admittedly the available figures for the last 24 months don’t really show this, but perhaps on a longer time frame this would be apparent)
Units…. lots and lots of units