Where Is Demand For Higher Than Average Residential Property?
The past five years have generally been a quiet period for the housing market, however some regions have more recently shown a substantial improvement compared with the average number of transactions over this period.
Over the year to March 2013 RP Data estimated that there were 400,209 house and unit sales nationally; 2.3% more sales than over the same period a year ago but 8.8% fewer sales than the five year average. Dwelling sales have been rising (at least in trend terms) since the housing market bottomed out in May last year. In fact, the number of house and unit sales transacted over the March quarter was the highest recorded since the three months ending November 2011.
Across the capital cities there are only two regions where transaction numbers over the year to March 2013 were higher than their respective five year average number of sales. In Perth, where market conditions were previously very soft prior to 2012, dwelling sales are now tracking 15.4% higher than the five year average. Sales activity in Perth has jumped by 25% over the past twelve months alone. The number of home sales in Darwin has also shown a significant rise over the past year, rising by just over 15% to be almost 2% higher than the five year average number of sales.
The capital cities where transactions are the lowest relative to their five year average sales rate are Hobart (-17.1%), Canberra (-17.0%) and Melbourne (-15.0%). The number of house and unit sales was lower over the year to March 2013 across each of these cities compared with the previous twelve month sales which demonstrate the relatively soft level of buyer demand.
Looking at the sales statistics from a more granular perspective, there were 60 council regions across the country where dwelling sales over the year to March 2013 where higher than the five year average.
Based on the council level data there is a clear trend in Western Australian regions bouncing back to an above average rate of sale, particularly council regions within the Perth metro area. Of the sixty council regions that were recording an above average number of sales over the year to March 2013; 37 (62%) were in Western Australia, 17 (28%) were in New South Wales, 3 (5%) were in the Northern Territory, 2 were in South Australia (3%) and 1 was in Queensland.
There is also an interesting trend across those areas where the number of sales is tracking significantly below the five year average. There were 53 council areas across the country where the number of dwelling sales over the year to March 2013 was tracking more than 25% lower than the five year average. Nearly half (47%) of these regions were located in Victoria and almost 20% were located in Tasmania, highlighting the relatively sedate housing market conditions in these states.
The three council regions that have recorded the most significant slowdown in sales over the year to March 2013 compared with their five year average are all key mining regions. The Shire of Roebourne which includes the suburbs surrounding Karratha recorded 144 sales over the year to March 2013; 45% lower than the five year average. Queensland’s Isaac Regional Council, which is home to the coal mining towns of Moranbah, Clermont, Dysart and Nebo (amongst others), recorded 252 sales over the year to March 2013; 45% lower than the five year average. Mining town heavyweight, Port Hedland is third on the list to show the most significant slowdown where transactions have slowed from a five year average of 243 sales down to 137 over the year ending March 2013.
The slowdown in these mining regions shouldn’t come as a great surprise considering the weakening in commodity prices and the slimming pipeline of infrastructure projects associated with the mining sector.
Article by RP Data research director, Tim Lawless