CoreLogic July 2020 Results
This week sales reversed the recent downward trend with 855 sales being well above our 12-month average of 613. There was an 8% increase in house sales, 55% increase in vacant land sales and no change in unit sales. Listings continued their very recent reversal of its downward trend, increasing by 1 % to 10,751. The increase in listings came solely from a 4% increase in vacant land for sale. Listings have now increased by 3% over the past month. The graph below shows the reversal of the listings trend that we wrote about last week.
Rental listings have continued to trend downwards decreasing by 4% to 3,555. This continual downward trend of listings will continue to help Perth avoid the decline in rents that is happening over in the Eastern states.
Corelogic released their July monthly home value index and the national results were very similar to June. The average decline across the nation was 0.6%, which was a slight improvement on the 0.7% fall in June. The capital cities average decline of 0.8% was in line with last month.
Perth recorded a 0.6% decline in the month with houses declining by 0.57% and units 0.85%. The 0.6% decline in July was a significant improvement on the 1.1% fall in June. Melbourne recorded a 1.2% fall, the largest in the nation, following a 1.1% fall in June. With Melbourne back in stage 4 lockdown and being hard hit by the halt on overseas migration, you would expect Melbourne to experience the largest price falls in the future.
While we are mentioning the halt on overseas migration, it is interesting to compare WA’s population growth with Victoria’s and what impact the restrictions on overseas and interstate migration is having.
The most recent data we have from the ABS is for the December quarter 2019 prior to the virus. Those figures show us Victoria’s population grew by 24,032 with 12,205 overseas, 2665 interstate and 9162 births. For the same period WA’s population grew by 8,244 with 4,598 overseas, -1013 interstate and 4659 births.
Now if we assume there is no interstate or overseas migration, this tells us Victoria has lost 62% of their population growth compared to 43% for WA. Now this only uses figures from December last year and not longer-term averages but it does demonstrate why the halt in overseas and interstate migration will have a larger effect on Melbourne property prices.
Finally the WA State Treasury Building Approvals data shows that although we have seen a spike in vacant land sales this so far has not translated into building approvals. The table below shows an 11.7% decrease in approvals for the month of June. Every state saw a decline in building approvals for June, which is not surprising, but we will wait and see each states response to the building stimulus measures.
Reproduced with permission from:
in house economist from Michael Keil @ michaelkeil.com