Sales volumes have fallen by about 3% between the April quarter of 2010 and 2009, highlighting that the residential property market is beginning to slow down, a trend we expect to continue for the remainder of 2010.
But not all regions around the country have recorded a fall in transaction numbers.
The regions that have seen the greatest rise in transaction numbers are generally those that faired poorly during the early parts of 2009. In the capital cities it is the premium markets that have seen a lift in sales compared to last year, while in the regional markets it is those regions located away from the coastline that have gathered pace.
For house sales, the greatest increase in the quarterly volume of sales has been recorded in the Northern and Robe council regions of South Australia, where sales volumes have doubled over the year, albeit from a very low base. Sales volumes have recorded the largest increase within Victoria’s Central Highlands Council, up 50%, again from a very low base.
If we take a look at the housing market we can see some trends starting to emerge.
The largest percentage improvements in sales volumes have been in the regional markets of Australia. Focusing on the top five council regions within each state, 25 of the top 35 regions were located outside of the capital cities.
Another striking trend is that the vast majority of capital city regions recording increase in house sales are also recording higher than average median prices. In all but one instance, the capital city council areas to have recorded the strongest change in sales volumes are all premium markets within their respective cities and in many instances these areas are home to some of the city’s most expensive houses.
With higher volumes there have also been higher prices – 31 of the 35 regions showing the largest increase in house sales have shown positive movements in the median house price between April 2009 and April 2010.
From a region perspective, the larger regional markets have generally seen the weakest performance in sales volumes. In a win for the non-coastal markets, the largest lifts in house sales have been recorded in the smaller and more remote markets.
Turning to units, there are also a number of trends across the council areas detailed.
The differential between the councils detailed outside of capital cities to those within is much closer across the unit market than it was for houses.
The reason for this is that houses are much more abundant right across the country, while units tend to be very much more concentrated in capital cities and larger regional areas. Seventeen of the 33 most improved councils based on sales volumes are located within capital city markets with the remainder in regional areas
Like the results for houses, very few of the regional councils listed as top performers are in larger regional areas of the country. The results are indicative of the soft housing demand and overall weaker performance within many of the larger and often coastal regional areas of the country over the last year.
Similar to the results for houses, the council areas within the capital cities that have recorded the strongest performance for sales volumes have generally been the more expensive areas of the city. Twelve of the 17 capital city regions have a median price which is above the current city wide median price.
Across the top performing council areas for units, 25 of the 33 regions listed have recorded positive growth in median prices over the last 12 months. Of those areas which have recorded price falls Queensland has again performed the poorest, with only one of the five areas listed recording positive growth in median unit prices. NSW had two regions recording a fall in median unit prices and there was one each in Victoria and WA.
Looking more holistically at all of the results you can clearly see that sales activity nationally is slowing. Seven of the suburbs listed amongst the best performers in terms of sales volume change for houses actually recorded a fall in sales volumes during the year. The unit market results were worse, with 14 or of the council regions listed recording a fall in sales volumes over the year.
Overall, the greatest increases in sales activity outside of the capital cities have been occurring within smaller regional areas of the country away from the coastline. Within the capital cities, sales activity has been ramping up in regions closer to the city centre, highlighting that demand for well located properties remains consistently strong and that demand for premium inner-city properties within capital cities has rebounded strongly over the last year.
Tim Lawless is the Director of Property Research at RP Data.
