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Everything you need to know about the state of Australia’s property markets in 17 charts – August 2022 - featured image
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Everything you need to know about the state of Australia’s property markets in 17 charts – August 2022

key takeaways

Key takeaways

Residential real estate underpins Australia's wealth.

Total outstanding mortgages against all residential housing (worth $9.8 trillion) are only $2.1 trillion - a very comfortable 21% Loan to Value ratio.

Over the last 12 months dwelling values around Australia increased by 8%, but regional markets outperformed (+17%.)

Signs of a slowing market include days on market increasing (it takes longer to sell a property) and vendors needing to discount their asking prices increasing slightly.

The number of property sales occurring is now slowing down, as is the number of new properties being listed for sale.

While house price growth is slowing, we're experiencing a rental crisis with rents skyrocketing.

Want to know what's happening to the housing markets around Australia?

Well, this monthly collection of charts from Corelogic will give you a good idea.

And our property markets have had a lot to contend with, haven't they?

As we sit here inflation is the highest it’s been for years and is only going to get higher, interest rates rose again this month and people are wondering how high they will go, plenty of stocks are down, the war in Ukraine continues, supply chains are broken, the pandemic is lingering, China is in lockdown, we have a new government, and on and on.

And according to our big banks, Australians must brace for the worst housing correction on record as rising interest rates and recession fears strangle the property market.

While Australia's economic fundamentals are still strong, consumer confidence has taken a significant hit and that's affecting our housing markets with buyers being more cautious and many taking a wait-and-see approach, while sellers’ confidence is more fragile in the face of recently sharply rising interest rates - and news of more to follow.

But despite all this, our housing markets have remained very resilient.

Residential real estate underpins Australia's wealth

  • The total value of Australian residential real estate was $9.8 trillion at the end of July 2022.
  • Outstanding mortgages against all residential housing are only $2.1 trillion - a very comfortable 21% Loan to Value ratio.
  • 57.3% of total Aussie household wealth is held in residential property - one of the many reasons neither the banks, the government or the RBA want a property crash.

State Of The Market July 2022

Change in dwelling values

  • Dwelling values in Australia are 8% higher over the past 12 months, that’s down from a cyclical peak of 22.4% recorded in the 12 months to January 2022.
  • Our property markets are fragmented with some still growing strongly, but every capital city has moved through its peak rate of growth now.
  • Over the last 12 months, dwelling values around Australia increased by 8%, but regional markets outperformed (+17%.)

Housing Downturn July 2022

Rolling Annual Change In Dwelling Values July 2022

  • In the three months to July, the change in capital city dwelling values fell 2.6% - but that's not really a crash is it?
  • Combined regional property markets also fell 0.2%.

Change In Dwelling Values 3 Months To July 2022

Our capital city markets are fragmented

Housing Cycles Adelaide July 2022

 

  • On the one hand, Adelaide property values are still rising strongly, up 24.1% over the year to record highs.
  • And Brisbane property values are still growing strongly, albeit a little slower.
  • Brisbane property values are up 22.1% over the last 12 months.

Housing Cycles Brisbane July 2022

  • At the other extreme Sydney house prices are now -5.2% below their record highs recorded in January 2022.

Housing Cycles Sydney July 2022

Sales volumes are slowing down

  • Sales volumes are starting to ease from the highs experienced during the recent property boom.
  • Corelogic estimates that in the 12 months to July, there were 581,138 sales nationally, up 0.6% compared to the previous year.
  • While up annually, initial sales estimates over the three months to July are now -16.0% lower than the same quarter of the previous year.

Change In Sales Volume 12 Months To July 2022

Monthly Sales With Six Month Moving Average National

We're now in a buyer's market

  • We've moved from a boom-time sellers' market into more of a buyer's property market.
  • At a national level, properties are taking longer to sell.
  • In the three months to July, the median days on market was 32, up from a recent low of 20 days over the three months to November.

Median Days On Market 3 Months To July 2022

  • Similarly, vendor discounting has increased from a recent low of -2.8% recorded in three months to April last year.
  • In the three months to July the median vendor discount at the national level was -3.8% -so vendors are really not having to slash their prices, despite what the media tries to tell us.

Median Vendor Discount 3 Months To July 2022

Here's how many properties are for sale at the moment

  • In the four weeks to July 31 2022, there were 35,458 newly advertised dwellings listed for sale nationally.
  • While the volume of new listings has steadied and is up 4.6% compared to the same time last year, the flow of new listings is now 2.8% higher than the five-year average for the equivalent period.
  • Sure vendors are a little nervous and discretionary sellers are sitting on the sidelines, but there's still plenty of properties available for sale. The problem is that very few are A Grade or investment grade. Owners of quality properties are holding on to them.

Number Of New Listings National Dwellings July 2022

Auction clearance rates are falling.

  • The combined capital city auction clearance rate continued to trend lower through the month of July, averaging 53.5% in the four weeks to July 31st according to CoreLogic.
  • This is down from 74.4% equivalent period of 2021
  • We update the weekly auction clearance results here each week.

Weekly Clearance Rates Combined Capital Cities 08 August

We're experiencing a rental market crisis in Australia

  • Unlike changes in dwelling prices, rental growth remains high across Australia, marking the sixth consecutive month that growth in rent values has been higher than growth in home values.
  • Rent values continued to climb 0.9% in the month of July, taking rents 9.8% higher over the year.

Annual Change In Rental Rates July 2022

Annual Change In Rental Rates National 08 August

Finance and Lending

  • Lending for property purchases fell -4.4% over the month of June.
  • This was largely led by a -3.3% decrease in owner-occupier lending, and investor lending down by -6.3%.
  • First homebuyer lending also declined -10% in the month.

Monthly Value Of New Finance Commitments 08 August

Portion Of New Lending For Investment Housing 08 August

Source of charts: CoreLogic Chart Pack, August 2022

About Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au
2 comments

If you look at the long-term trends, Adelaide has underperformed over the decades. It's a lovely place to live, but strategic investors look at long-term trends not short-term ones

0 replies

It looks like Adelaide is having its day in the sun with strong capital growth leading the nation and a turn strong around in people leaving for Melbourne and Sydney and in fact versing that trend with more people coming than leaving (remains to be s ...Read full version

1 reply

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