2015 Market Wrap up

by George Nikos

Growth conditions across the national housing market for 2015 can best be described as diverse.

At the end of 2015 we have seen the total value of Australian residential property reach an estimated $6.3 trillion, up from $5.7 trillion a year earlier, easily making residential property the nation’s single largest asset class. Approximately $283 billion worth of housing stock transacted over the year across roughly 500,000 house and unit sales.

Growth conditions across the national housing market during 2015 can best be described as diverse. While the headline figures indicated that the combined capital cities recorded strong capital gains, the reality was that Sydney and Melbourne were the only capital cities to see substantial increases in values. While the CoreLogic RP Data Home Value Index showed combined capital city home values rose by 8.7% over the 12 months to November 2015, only Sydney (12.8%) and Melbourne (11.8%) recorded double digit growth. Brisbane (4.0%), Adelaide (3.3%), Hobart (1.1%) and Canberra (4.5%) each recorded relatively moderate value rises while values fell by -4.1% and -4.2% respectively in Perth and Darwin.

Regional housing market performances were also quite diverse with coastal lifestyle markets typically recording value rises whilst markets linked to the resources sector have continued to see values and transaction activity slump. As the year progressed we have seen the rate of value growth across the capital cities start to slow culminating in value falls in Sydney and Melbourne over the past three months. We have also seen lending criteria tightened significantly by lenders, particularly to investors, and this has resulted in a sharp slowdown in lending to domestic investors over recent months.

First home buyers have continued to show little sign of a resurgence however there may be some hope next year given a reduction in competition from investors. Meanwhile, housing construction activity is booming with a substantial pipeline of new construction still to be delivered. We are seeing more units, particularly high-rise units, approved for construction than ever before. Over the past 12 months there have been 116,111 houses approved for construction and 117,072 units.

As we head into 2016, early signs indicate value growth in Sydney and Melbourne is slowing, whether this results in further value falls remains to be seen, however the rate of appreciation next year is likely to be more moderate than the year just gone. Elsewhere it looks as though housing market conditions are starting to pick-up in South-East Queensland and potentially other markets like Canberra and Hobart as well. Of course the changed lending environment will continue to be a factor in the market in 2016, however, interest rates are set to remain at their historically low setting which will continue to spur demand across the housing market.

 

* Source CoreLogic.com.au (Rpdata Australia)

Similar posts

March 29, 2018

What’s this home’s secret sustainability weapon?

It’s stylish and contemporary, but beneath the surface of this Camperdown residence are features which really make it a stand-out, and provide a glimpse into the future of sustainable living. One set to raise eyebrows among home hunters is tucked away where its new owner will rarely venture. Hidden down the side of the property […]

March 22, 2018

Location, location, liveability

forward thinking could add thousands to your property’s value A new L-word has popped up alongside the real estate mantra of ‘location, location, location’ – and it’s shaping up to be a game-changer. Liveability is the latest property term on everyone’s lips, and relates to a home’s running costs, comfort and sustainability. Progressive real estate […]

March 7, 2018

Urban Innovators: How to Find a Real Estate Agent with an Edge

It’s one of the most important job interviews of your life – and this time, you’re in the power seat. If you’re planning to sell a property, make time to sit down with at least three potential real estate agents and ask some hard-hitting questions. When your home is your biggest asset, a successful sale […]