This week we will review the real estate data over the past fortnight, Corelogic’s December quarter rental report and ABS data regarding loan commitments and property valuations.
Over the past two weeks sales have continued to rebound strongly after the Christmas/New Year period. For the week ending the 17/01/2021, sales increased by 10% to 763 and by another 13% last week to 856. The increase in sales this week was driven by a 15% increase in house sales, 24% increase in unit sales and a 15% decrease in vacant land sales. However the decrease in land sales was offset by a 9% increase the week before.
This is the last time we will look at the graph below comparing sales over the Christmas period with this year and last year. We can see a very similar pattern except sales this year are approximately 30% higher demonstrating the improvement in the property market.
Listings have remained steady over the past two weeks, around the 8,310 mark. The following graph shows the recent stability in listings after declining by approximately 30% over 2020.
Rental listings over the two weeks have also remained consistent with a 1% increase the previous week followed by a 2% decrease this week to finish at 2,864. The vacancy rate in Perth is still below 1% compared to 3.3% in Sydney and 5.4% in Melbourne. Corelogic reported the largest rent increases in Australia over the December quarter occurred in Perth with a 9.7% increase. This compared to a 0.8% national average. Although rents are continuing to increase with the low vacancy rates, Perth rents are still well below 2013 levels.
The ABS recently released data showing that the property market across Australia is rebounding strongly and has clearly avoided the forecast decreases predicted at the start of the pandemic (I recall forecasts of 20-30% falls in property prices). The total value of new loan commitments increased by 5.6% in November to reach a record high of $24 billion. New homebuyers, not investors, made up the bulk of this increase with a 5.5% increase to $18.3 billion.
It was worth doing a quick check on the value of real estate in Australia. According to the ABS Survey Income and Housing and the Australian System of National Accounts (ASNA) estimates the following table shows the value of real estate in Australia is $6.53 trillion while our loan commitments are $1.72 trillion leaving a net value of $4.81 trillion. If we divide $4.81 trillion by Australia’s population of 26 million, we can see that Australia’s net property value is $185,000 per capita.