Residential property sales transactions soared to a 17-year high with more than half a million homes changing hands across the country in the year ending August, as buyers rushed to take advantage of the ultra-low interest rates and vendors cashed in on the strong demand.
In the past 12 months, the number of houses and units sold had jumped 42 per cent to 598,000 nationwide – the highest number of annual sales since 2004.
In NSW, home sales climbed by 38.9 per cent to 191,090 from a year ago, while Victoria notched a 34 per cent increase to 129,933.
The previously weaker markets of WA and NT posted 62 per cent and 58.5 per cent growth in annual home sales respectively – the largest gains across the states and territories.
Sales transactions rose by 38.6 per cent in South Australia, 54 per cent in Queensland, 27.1 per cent in the ACT and by 10.6 per cent in Tasmania.
CoreLogic research director Tim Lawless said the significant surge in housing demand at a time when overseas migration had stalled was driven by cheaper credit, record low mortgage rates and higher rates of household savings.
The strong demand sparked a rapid rise in prices that had lifted the estimated value of residential housing stock across Australia to $8.9 trillion at the end of August.
“It was only April when the aggregate measure of the housing asset class broke the $8 trillion mark, and it’s likely when we report our September numbers on October 1, the value of the Australian housing market will be greater than $9 trillion,” Mr Lawless said.
In Sydney, more than half (58 per cent) of all sales were houses. It accounted for more than two-thirds (68 per cent) of transactions in Melbourne and in more than seven in 10 (73 per cent) sales nationally.
Housing turnover – the number of homes sold as a percentage of the total number of dwellings – has climbed to 5.6 per cent across the country, the highest rate in 12 years.
Queensland posted 6.8 per cent turnover rate for the year – the highest across the states and the strongest since 2008.
Mr Lawless said the higher turnover rate was being supported by a surge in interstate migration along with relatively affordable housing prices compared with NSW and Victoria.
The ACT recorded the second highest rate of housing turnover in the previous year, with 6 per cent of properties selling.
Housing turnover rose to 5.8 per cent in NSW, 5.6 per cent in WA, 5 per cent in SA and 4.9 per cent in Tasmania.
NT recorded the lowest turnover with only 3.7 per cent properties trading over the past year, despite the robust sales.
Turnover in Victoria was the second weakest with just 4.6 per cent of properties transacting over the year.
“The weaker turnover reading has been impacted by multiple lockdowns as well as worsening housing affordability,” Mr Lawless said.
“Also, a large number of newly built dwellings has added to the state’s overall housing supply. Over the past five years, Victoria’s dwelling count has increased by 280,900, the largest increase of any state or territory.”
He said housing turnover was likely to increase a little from here, but he expected to peak in early 2022.
“There is already evidence the monthly number of home sales is starting to ease, although reading through the additional disruption of lockdowns makes the trends harder to interpret,” he said.
“Although there may be a rise in activity post-lockdown, home sales are likely to reduce over the medium term due to affordability constraints, a rise in housing supply and the lack of international migration.”
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