Dwelling construction surges yet housing turnover falls

Dwelling construction surges yet housing turnover falls
Dwelling construction surges yet housing turnover falls

Despite a surging population and record high levels of new construction, a lower proportion of housing stock is selling. 

The analysis, paired annual settled sales data with dwelling counts over time to show that the proportion of total housing stock turnover on an annual basis. 

The analysis found that over the 12 months to September 2017, just 5% of the national housing stock transacted; the lowest proportion of stock-turnover since April 2012 when it was at an 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.

Across the combined capital cities, a record-low of 4.7 percent housing stock transacted over the past year which was well down on the 5.6% average. Across the combined regional markets, 5.6% of housing stock transacted which was slightly higher than the 5.5% average. In both the capital city and regional housing markets stock turn-over is slowing. 

Dwelling construction surges yet housing turnover falls

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 an 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. 

Dwelling construction surges yet housing turnover falls

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.

Dwelling construction surges yet housing turnover falls

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. 

Dwelling construction surges yet housing turnover falls

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. 

Dwelling construction surges yet housing turnover falls

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%). 

Dwelling construction surges yet housing turnover falls

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% 

Dwelling construction surges yet housing turnover falls

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.

Dwelling construction surges yet housing turnover falls

Canberra: Over the past year, 4.8% of housing stock sold which is an historic low level. 

Dwelling construction surges yet housing turnover falls

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. 

 

 

 

 

 

 

 

 

 

 

 

 

Cameron Kusher

Cameron Kusher

Cameron Kusher is senior research analyst at CoreLogic RP Data.

Tags: 
Stock Levels Apartment Sales

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