According to CoreLogic, about 598,000 houses and units were sold in Australia in the year ending August 2021, the greatest number of annual sales since 2004 and a 42 per cent increase over the previous 12-month period. The number of homes sold last year was 31% more than the decade average and 24% higher than the 20-year average.
“It’s a real story of extremes, with record-low levels of listings this year and record levels of demand leading to a huge number of sales and the biggest price growth since 1989,” said CoreLogic research director Tim Lawless.
Annual home sales are much higher across the states than they were a year ago, with every state and territory except Tasmania reporting a year-on-year increase of more than 10%. The largest annual sales are in New South Wales, indicating a strong and healthy property market.
While such a large increase in housing demand may appear surprising at a time when international migration has slowed, the big increase in home sales can be explained by a boost in local demand from previously low levels.
In addition, credit policies have been loosened, and mortgage rates have dropped to new lows, attracting more Australians to enter the property market.
Furthermore, since March 2020, a greater rate of household savings has bolstered consumer deposit levels and mortgage serviceability, while government incentives including stamp duty discounts and deposit guarantees have also encouraged demand.
Housing turnover will probably continue to increase in the short term as more spring listings come onto the market, with Mr Lawless saying he expected it to peak early next year.
Many state governments are looking to move away from property transaction disincentives, such as stamp duty, which would encourage increased turnover in the long run, according to Lawless.
“It’s encouraging to see state governments in the ACT, SA, and NSW moving away from stamp duty, albeit with different strategies and timelines, which should assist to eliminate barriers for homeowners and prospective buyers to transact in the property market.” He said
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