Home Sales

Queensland has recorded its highest quarterly property sales settlement number since 2007.

Some 51,771 Queensland property sales were settled during the first quarter of 2021, according to the latest analysis by PEXA, Australia&rsquo;s leading digital settlement platform.

Queensland&rsquo;s 40% jump year-on-year illustrates the current confidence in the north-eastern Australian property market.

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Western Australia saw 57% growth year-on-year in recording its highest property sales settlement number since at least 2015.

Throughout January and February, WA has seen more than 15,000 property sale settlements, which was 5,000 more than the corresponding period in 2020, prior to the impact of COVID-19.

Mike Gill, the senior research Manager, PEXA, said the Australian property market continues to perform strongly.

And he sees no strong reason for this trend to change in the immediate future.&nbsp;

&ldquo;We have seen a really strong start to the year Australia wide, with the nation recording 30% year-on-year growth in property sales settlements when compared to the beginning of 2020.

&quot;We have also witnessed considerable momentum build in Victoria, with the state living up to its property powerhouse reputation recording the most sales settlements (more than 55,000) of any state during this period.&quot;

New South Wales posted 26% growth year-on-year, and South Australia experiencing a jump of 28% year-on-year for the quarter, said Gill.

Australia&rsquo;s property sector witnessed almost 200,000 properties settled during the first quarter of 2021, PEXA calculated.

PEXA, Australia’s leading digital property settlement platform, calculated in the past quarter Queensland recorded 51,771, its highest sales number since 2007.



jchancellor

Queensland's first quarter residential sales jump 40% year on year: PEXA

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There are indicators that home ownership is starting to decline, the Australian Housing and Urban Research Institute (AHURI) suggests.
However, Australia has maintained consistent rates of home ownership of around 68% since 1976. 
"The composition of homeowners, those who own outright and those who are currently servicing a mortgage, has changed with houses under purchase now out numbering those owned outright.
"The last 20 years has also seen sharp growth of migration to Australia and this may have played a role in sustaining home purchase rates." 
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"The rate of home ownership is higher amongst older age groups, with 55-64 year olds maintaining around 80 per cent ownership rates over the last 30 years to 2011."
 
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In the submission to the House of Representatives Standing Committee on Economics, AHURI observed that home purchase has decreased mostly for those in the lowest income cohorts, particularly for those aged 24-35 years. 
"Between 1981 and 2011 the rate of purchase for those in the lowest household income quintile fell from 62.7 per cent to 31.3 per cent.
"In interviews with 87 Indigenous people living in various forms of rental housing, AHURI research found that most saw home ownership as an economic burden even when income was assessed not to be a barrier for a quarter of households. 
"Home ownership for some is a more complex due to the relationship with land and implications of individual ownership. 
"A study of home-owners found that around 13% of owners ‘churn’ in and out of ownership while 9% permanently leave. There has been a reduced ability to maintain home ownership due to increased divorce rates and mortgage stress.
"Increasing numbers of homeowners are approaching retirement with mortgages, and a sizeable number of older mortgagees are dropping out of homeownership which is a flag for potential pressure on other areas of the housing system such as a need to access housing assistance." 
Aspects affecting home ownership rates include the increase in house prices and increase in size and period of debt. There is also the positive side of wealth creation for home owners, but this does not happen without risk.
"AHURI research which looked at metropolitan Melbourne found that one in eight of all sellers lost money in real terms and that there is greater risk of making a loss for dwellings in outer urban areas where low to moderate income earners are most able to purchase, and if the dwelling is sold in the first three years. 
"However, higher house prices—while aiding wealth accumulation for those who own or are purchasing—hinders access for aspiring first home buyers. 
"AHURI research also indicates that owners are now more accustomed to using new flexible mortgage products to access their housing wealth, and so use that wealth as a financial buffer to meet needs over time."
AHURI believes that if supply does not match demand it can be a contributing factor to house price pressures and declining affordability.
"Low interest rates, lower unemployment combined with easy credit for housing, have worked together to increase demand. 
"New household formation is a driver for demand for housing. Traditionally this has been seen as part of the ‘housing career pathway’ when partnering and leaving home or moving from private rental to home ownership. 
"Immigration creates new households and therefore increases demand for housing. AHURI research suggests that migrants historically have had a higher purchase rate than native-born Australians. 
"Population projections show that the rate of population increase is expected to be steepest among people aged 65 year and over and this will translate into a surge of singles living alone. 
"Population ageing poses demands for smaller housing in nearby suburbs to enable downsizing and equity release.
"AHURI research found that difficulties faced by downsizers included availability of suitable housing, its cost and affordability, and the suitability of its location.
Evidence is varied on whether land release assists in reducing house prices. 
"AHURI research has documented that connections between land supply and price, which can flow on to house price, are complex with many factors affecting both land and house prices. However, a well-run and timely land release policy can help with the supply of new houses.
"With a strong, nationally coordinated policy framework emphasising housing affordability and dedicated affordable housing creation, state housing policy and planning legislation then promotes affordability, and enables affordable housing creation, through: 
<ul>
<li> system-wide approaches to facilitate land supply in preferred locations, by making planning processes more efficient and through targeted infrastructure     investment;</li>
<li> better needs assessment and planning methodologies to forecast, monitor and respond to housing demand, supply and affordability trends;</li>
<li> specific planning levers or mechanisms to secure land for new affordable housing development and retain existing levels of low-cost housing.</li>
</ul>
"The proportion of new loans for investment housing is at a record high. Up until 2010, lending for owner occupied housing was tracking well above investment housing, however this trend has changed since 2010 after which lending for investment has continued to rise but housing finance commitments for owner occupation started to decline. 
"AHURI research finds that stamp duty is found to impede access to home ownership because it tightens borrowing constraints.
"The provision of the First Home Owner Grant (FHOG) raises the rate of home ownership and accelerates ownership, but research finds it is regressive in impact as it primarily favours those that would have eventually become home-owners. 
"Younger (less than 45 years of age) owner-occupiers, most of whom have relatively low equity in their dwellings and face high mortgage debt, are relatively disadvantaged by the structure of tax expenditures because of their inability to deduct the costs of purchasing their home from the income it produces. 
Recent AHURI research examined government spending related to housing in Melbourne for the 2011–12 financial year. The total housing expenditure figure for Melbourne was $5.2 billion. 
"Public housing was the smallest proportion of this figure, at around $107 million or 2 per cent of the total; the First Home Owners Grant, for both new and existing properties, had an outlay of $277 million, 5.3 per cent of the total. 
"Rental assistance had a total of $500 million (9.6% of the total). These expenditures were eclipsed by the negative gearing ($861 million) and capital gains tax exemption ($3.5 billion) estimates, which comprised 17 per cent and 67 per cent of total outlays respectively."
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jchancellor-FAypfDUnLy

Stamp duty constraints impede home ownership: AHURI

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GUEST OBSERVER
New home sales declined by 4.4 percent in May after falling by 4.7 percent in April. The decline reflected a fall in detached house sales (-6.7 percent) but sales of ‘multi-units’ rebounded (+4.9 percent).
The new home sales data is important for housing-dependent companies such as builders, developers and retailers.
What does it all mean?
The latest weakness in new home sales resonates with all the other data on the housing sector - in particular the data on home loans, which has been decidedly more mixed in the past few months. It is clear that housing activity is consolidating with potential home buyers being more circumspect on purchases – a result which is encouraging, as it should ensure a much more sustainable housing market.</div>
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 Interestingly the data is for May and would not fully factor in the surprise decision by the Reserve Bank to cut the cash rate, and the subsequent decision by the banks to pass it on to mortgage rates. It is likely that the rate cut and the speculation of low interest rates over the medium term will support demand for property.</div>
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<div class="column">Importantly the pipeline of new home building remains solid and should support an array of sectors and broad- based activity. The latest data doesn’t have a great influence on the next interest rate decision. The Reserve Bank is determining whether lower-inflation Australia can justify having an interest rate structure closer to those in other major advanced economies.</div>
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<div class="column">What do the figures show?</div>
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<div class="column">New home sales</div>
<div class="column">Total seasonally-adjusted new home sales declined by 4.4 percent in May 2016 after sliding by 4.7 percent in April. The decline in total sales was reflected in a decline detached house sales (-6.7 percent) but sales of ‘multi- units’ rebounded (+4.9 percent). The Housing Industry Association reported: “In the month of May 2016 detached house sales declined in three of the five mainland states: New South Wales (-11.5 percent); Victoria (-8.2 percent); and Queensland (-11.0 percent). Detached house sales increased in South Australia (+3.8 percent) and in Western Australia (+5.4 percent).”
What is the importance of the economic data?
The Housing Industry Association releases data on the sales of new homes each month. The HIA collects the data each month from a sample of Australia's largest 100 home builders. 
The survey covers around 14 percent of the home building industry.
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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Back to back declines in new home sales: CommSec's Savanth Sebastian

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We’re now seeing home sales trend below $400,000 which is making it much harder for price-sensitive buyers to purchase into capital city markets.
37.4% of all home sales nationally were at less than $400,000 compared to 52.0% between $400,000 and $1 million and 10.6% over $1 million over the 12 months to June 2015. 
Sales below $400,000 were at a record low over the past year and sales above $1 million were at a record high.
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Across capital cities, 25.1% of home sales were under $400,000, 60.1% were between $400,000 and $1 million and 14.8% were in excess of $1 million. 
Twenty years ago 95.2% of all capital city houses and 96.7% of units sold for less than $400,000. Meanwhile, only 0.4% of all houses and 0.3% of all units sold transacted for more than $1 million.
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Ten years ago, the proportion of sales under $400,000 had fallen sharply relative to 10 years earlier. At this time, 66.2% of houses and 73.8% of units had sold over the year for less than $400,000. In comparison, 4.0% of houses and 2.3% of units across the capital cities sold for more than $1 million. 
Five years ago, around one third of all capital city house sales (34.1%) and 46.4% of units sold for less than $400,000. At the same time, 10.1% of capital city houses and 3.8% of units sold for more than $1 million.
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Looking at the activity over the past year: 
Canberra (7.4%) and Sydney (7.8%) recorded the lowest proportion of house sales under $400,000. 
Hobart (61.2%) was the only city to have more than half of all house sales below $400,000. 
Currently, the unit market offers more opportunity to purchase below $400,000 however, each of Sydney (16.3%), Melbourne (35.9%), Perth (38.5%), Darwin (29.7%) and Canberra (43.3%) recorded a majority of unit sales above this price point. 
CoreLogic RP Data reported a record high proportion of houses and units sold for more than $1 million over the past 12 months. In Sydney, more than a third of all houses (36.8%) sold for more than $1 million. Melbourne had the second highest proportion of sales over $1 million (17.7%). 
Although Melbourne had a record high proportion of houses sold over $1 million it was less than half the proportion of sales in excess of $1 million recorded in Sydney. 
For units, Sydney had the highest proportion of sales over $1 million (11.6%) and was the only capital city in which more than 10% of unit sales were in excess of $1 million. In fact, Sydney had a higher proportion of unit sales over $1 million than each of Brisbane, Adelaide, Hobart, Darwin and Canberra had for houses. 
Although we anticipate that the rate of capital growth will slow over the coming year we still expect values to generally rise. As a result we would expect a further decline in the proportion of homes selling below $400,000. 
 
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Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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ckusher-ujnxiKuFQs

Home sales trend below $400,000: Cameron Kusher

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GUEST OBSERVER
The cost of housing continued to rise across most parts of the country over the past 12 months.
Bracket creep should come as no surprise in markets like Sydney and Melbourne where dwelling values have increased by 77% and 61% respectively over the past five years.
While Sydney and Melbourne dominated as the two capitals with the highest proportion of sales at at least $1 million, most other capital cities and regional areas also enjoyed a proportional lift in home sales over the million dollar mark.
The CoreLogic analysis confirmed that over the 12 months to June 2017, 15.4% of all house sales and 8.8% of all unit sales nationally were at a price of at least $1 million. By comparison, 12 months earlier 14.4% of all house sales and 7.5% of all unit sales were at least $1 million in value.
The latest data shows that instances of dwellings selling for at least $1 million is much more prevalent across the combined capital cities. Over the 12 months to June 2017, 23.2% of all houses and 10.8% of all units sold in capital cities were sold for at least $1 million. The proportion of sales of at least $1 million has increased over the year from 21.5% of houses and 9.1% of units.
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While regional housing markets generally have lower housing costs than capital cities, the proportion of sales occurring for at least $1 million is also increasing in these areas. Across the combined regional areas the proportion of houses selling for at least $1 million has increased from 3.5% in June 2016 to 4.1% in June 2017. Meanwhile, the proportion of units selling for at least $1 million has increased to 3.5% of all sales in June 2017, up from 3.2% a year earlier.
Delving into the individual capital cities, and not surprising, Sydney and Melbourne have had substantially more properties sell for at least $1 million over the past year than any other capital cities.
Over the past year, 47.8% of all houses and 21.3% of all units sold in Sydney transacted for at least $1 million. By comparison, 10 years earlier just 13.8% of houses and 4.7% of units transacted from at least $1 million over the year.
In Melbourne, more than a quarter (25.9%) of house sales and 7.4% of unit sales were at least $1 million in value. By comparison, ten years earlier 5.8% of house sales and 2.7% of unit sales over the year were at least $1 million.
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In all of the other capital cities the proportion of houses selling for at least $1 million is higher than it was a decade ago. More than 10% of house sales over the past year in Perth and Canberra were at least $1 million in value. Perth is also the only city to have recorded a lower proportion of unit sales of at least $1 million over the 12 months to June 2017 compared to a decade earlier.
With dwelling values continuing to climb, we anticipate that in another 12 months we’ll see an even higher proportion of sales sitting at or above $1 million.
The flip-side to this is that the ongoing increase in the proportion of residential properties selling in excess of $1 million highlights the ongoing deterioration in the availability of housing affordability.
Although the Federal Government attempted to address housing affordability in the Budget this year, it is clear that in order to improve housing affordability there is much more work to be done on both supply and demand drivers of the market.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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Million dollar sales reach record levels: Cameron Kusher

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New home sales increased by a further 15.2 per in November to reach a decade high.

The HIA’s economist, Angela Lillicrap noted the HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states, saw sales nationally increase in November across the five states surveyed.

There was a notable increase in the two largest states.

Sales in Victoria rose 20.6 per cent as they emerged from stage four restrictions.

A 15.9 per cent increase was recorded in New South Wales which had been lagging other jurisdictions.

“This data precedes the extension of HomeBuilder which was announced on 29 November 2020," Lillicrap noted.

“The extension of HomeBuilder should see strong sales of new homes reach into 2021.

Across the country, new home sales in the three months to November 2020 were higher in all regions when compared with the same period in 2019: Western Australia (108.8 per cent), South Australia (57.6 per cent), Queensland (34.0 per cent), Victoria (22.2 per cent) and New South Wales (20.7 per cent).
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New home sales increased by a further 15.2 per in November to reach a decade high

New home sales reached decade high in November

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An overseas buyer has paid $9.2 million for a four bedroom house in Toorak, at 12 Kenley Court setting the per-square-metre price at a record high.
The Foreign Investment Review Board reportedly approved the purchase by a Chinese national.
It was at a rate of $12,169 a square metre, eclipsing the record of $11,600 set in March by a three-bedroom house at 66 Clendon Road.
The cul de sac holding is 756 square metres. 
It was listed by Abercromby's agent Ada Taylor and Hugh Hardy.
Last month there was a Toorak offering by the longtime Australian golf promoter Tony Roosenburg. 
The <a href="https://www.realestate.com.au/property-house-vic-toorak-128040366" target="_blank">knockdown 1970s Sargood Street home</a> on 430 sq m came with plans by architect Rob Mills (below).
But the 5 Sargood Street offering was passed in at $4,010,000, with just the one bidder.
Kay &amp; Burton agents Michael Gleeson and Nicole Gibson had a $4 million to $4.3 million price guidance.
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Keener bidding could have seen the recent $11,000 per sqm land value record neared or bettered. 
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j.ballantyne1990-6AQqhLzZaK

Toorak's residential price per square metre hits new high

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EXPERT OBSERVER
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According to the Housing Industry Association, private house sales rose 3.6 per cent in August. Sales for the three months to August were up 36.5 per cent on a year ago.
In the first 16 days of September, home prices in the five mainland capital cities were down 0.2 per cent compared with the end of August. Prices were mixed across the cities: Sydney (-0.3 per cent); Melbourne (-0.5 per cent); Brisbane and Adelaide (both up 0.3 per cent); Perth (up 0.1 per cent).
Data on home prices influences spending and wealth. Used vehicle prices affect consumer wealth and affect vehicle affordability. New home sales are a guide into conditions in home building construction.
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<h1>What does it all mean?</h1>
- New home sales have soared over the past three months under the influence of the HomeBuilder Scheme. Used vehicle prices have soared in response to higher demand and lower stock levels. And home prices continue to hold up, supported by bank lending and low interest rates.
Up to May, Sydney and Melbourne home prices led the way higher alongside Hobart. Now Sydney and Melbourne prices are correcting and it’s the turn of Brisbane and Adelaide to drive national home prices higher. While the jobless rate has risen, interest rates are at generational lows and banks continue to lend,
<h1>What do the reports and figures show?</h1>
New Home Sales
According to the Housing Industry Association private house sales rose 3.6 per cent in August. Sales for the three months to August were up 36.5 per cent on a year ago.
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The HIA report:
·        “New home sales for the six months to August 2020 were 8.7 per cent higher than in the same period the year before.
·        New Home Sales in Western Australia were 91.1 per cent higher in the past six months than in the same period last year and 4.2 per cent higher in Queensland for the same period of time.
·        New Home sales were static or lower for the past six months in Victoria, New South Sales, and South Australia as the pickup in sales due to HomeBuilder have not offset the losses due to the COVID recession.
·        Sales in WA at this time in 2019 were at record low levels following the bottom of the mining investment cycle, a situation that was exacerbated by the credit squeeze in 2018.
·        The combined impact of HomeBuilder, the WA State Government’s Building Bonus and pent-up demand for housing will see home building pull the WA economy forward. The surge in home building work from as early as the December quarter will see more skilled workers return to WA pursuing employment opportunities which will also underpin demand for this new housing stock.”
CoreLogic Daily home value index
In the first 16 days of September, home prices in the five mainland states were down 0.2 per cent compared with the end of August.
Prices were mixed across the cities: Sydney (-0.3 per cent); Melbourne (-0.5 per cent); Brisbane and Adelaide (both up 0.3 per cent); Perth (up 0.1 per cent).
What is the importance of the economic data?
The Housing Industry Association compiles a New Home Sales report each month. The data provides insights into the home construction sector.
CoreLogic maintains a daily index of home values that provides insights into consumer spending and the state of the established housing market.
<h1>What are the implications for investors?</h1>
Investors have a raft of relatively new indicators to watch to get a sense of how individual sectors and companies are faring, as well as the broader economy.
The Reserve Bank, governments and both regional and major banks are playing key roles in supporting economic recovery. However, there is still some way to go.
CRAIG JAMES is the Chief Economist at CommSec
 
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