National Media Release

RP Data Weekly Property Pulse

Released: Friday 15 March 2013

Home sales rise from the ashes over second half of year
Sales transactions collated by RP Data research analyst Cameron Kusher show that throughout 2012, house and unit sales fell with the annual number of sales increasing since their lowest levels seen since 1996.
During 2012, there were 389,069 house and unit sales over the year according to RP Data estimates. Nationally, sales were -0.3 per cent lower than in 2011, and -13.7 per cent lower than the five-year average level.
Commenting on the results, Cameron Kusher said that throughout the year sales activity did improve, with transactions 7.6 per cent higher over the second six months compared to the first. The improvement in transaction activity occurred in concert with an increase in home values over the second half of the year, he said. Capital cities saw the most sales activity with 65.9 per cent of all house and unit sales occurred within a capital city region; a result slightly lower than the 66.7 per cent recorded in 2011. The number of annual capital city sales was -1.4 per cent lower than in 2011. In comparison, regional housing markets recorded a 2.0 per cent uplift in transaction activity compared to 2011.

Rolling annual number of house and unit sales Capital cities vs. regional markets
700,000
600,000 500,000

400,000
300,000 200,000 100,000 0 Dec 94

Dec 96 Dec 98 Dec 00 Rolling annual capital city sales

Dec 02 Dec 04 Dec 06 Rolling annual regional sales

Dec 08 Dec 10 Dec 12 Rolling five year average

Source: RP Data

Rolling annual number of house and unit sales nationally

700,000 600,000

A separation of house and unit sales transactions over the calendar year shows that 72.4 per cent of all sales were for houses; the last time the proportion was this high was in 2005.
Interestingly, the proportion of dwelling approvals for units was at an historic high in 2012, despite the fact the proportion of house sales was at its highest level in 7 years. Keeping in mind off the plan unit sales are not included in the transaction counts until they settle, the actual ratio of house to unit sales may be revised, Cameron Kusher said. Over the year, house sales were 2.5 per cent higher than they were over 2011 and unit sales were -7.0 per cent lower. Compared to five-year average levels of sales activity, house sales were -10.2% per cent below average while unit sales were -21.6 per cent lower. Over the second half of 2012, the quarterly sales data shows that there was an improvement in sales activity. While this improvement was evident in capital city housing markets, regional volumes remained quite flat. This increase is reflective of a delayed impact caused by mortgage rate cuts over the past 12-18 months and mirrors the increase in capital city home values from June 2012 onwards. It also reflects improving consumer sentiment throughout late 2012. As I mentioned previously, 65.9 per cent of all house and unit sales across the country throughout 2012 were in a capital city market. Across these cities, 29.7 per cent of all capital city sales were in Sydney followed by 27.1 per cent in Melbourne, 15.1 per cent in Brisbane, 15.0 per cent in Perth and 7.8 per cent in Adelaide. Across most capital cities, the number of house and unit sales was lower in 2012 than in 2011. The exceptions were: Brisbane (+11.9%), Perth (+24.7%) and Darwin (+21.8%). In all other capital cities, transaction volumes were lower in 2012 than 2011, they were down -12.3% in Sydney, -5.3% in Melbourne, -0.2% in Adelaide, -7.3% in Hobart and -12.9% in Canberra.

500,000
400,000 300,000

200,000
100,000 0 Dec 94

Dec 96

Dec 98 Dec 00 Dec 02 Rolling annual house sales

Dec 04

Dec 06 Dec 08 Rolling annual unit sales

Dec 10

Dec 12

Source: RP Data

Rolling quarterly number of house and unit sales Capital cities vs. regional markets
120,000 100,000 80,000 60,000 40,000

20,000 0 Dec 94

Dec 96

Dec 98 Dec 00 Dec 02 Rolling quarterly regional sales

Dec 04

Dec 06 Dec 08 Dec 10 Rolling quarterly capital city sales

Dec 12

Source: RP Data

Annual number of house and unit sales Capital city markets

Capital city Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra Combined capitals 2002 117,815 93,624 69,740 29,829 48,286 7,229 2,702 11,919 381,144 2003 106,729 87,718 72,979 28,422 52,861 7,133 3,540 10,370 369,752 2004 77,938 78,005 51,692 25,623 44,804 5,342 4,000 7,974 295,378 2005 74,069 83,129 50,636 24,848 53,855 4,886 4,219 8,211 303,853 2006 80,795 83,192 57,889 26,129 48,304 5,176 3,833 9,196 314,514 2007 94,724 105,124 69,036 29,400 39,957 5,639 3,424 10,616 357,920 2008 78,498 82,093 43,014 23,726 30,158 4,339 3,086 7,949 272,863 2009 106,157 97,470 53,762 24,920 42,326 5,384 3,413 10,527 343,959 2010 89,426 87,622 40,879 22,752 32,930 4,455 2,488 9,208 289,760 2011 86,754 73,475 34,570 20,091 30,902 3,852 2,408 8,152 260,204 2012 76,114 69,574 38,684 20,050 38,527 3,572 2,934 7,104 256,559

Source: RP Data

Nationally, annual sales volumes have not been this low since 1996 however, across individual capital cities sales there is quite a lot of variation since we have last seen volumes so low. Sales transactions have increased over the year in Brisbane, Perth and Darwin therefore sales were lower in 2011. In Sydney, annual sales volumes havent been this low since 2005, in Melbourne, Adelaide and Canberra sales transactions havent been this low since 1996 and the last time Hobart sales were lower was in 1988. While transaction activity remains at such low levels it does not bode well for any significant increase in home values. It is encouraging to see a lift in sales transactions over the second half of 2012; a result that is in-line with the ongoing increase in home values over the period. However, this trend will need to continue throughout 2013 before the total number of home sales returns to the long term average level. A stable interest rate environment and a sustainable improvement in consumer sentiment would increase the likelihood of further increases in buyer demand throughout 2013, Cameron Kusher said.
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