The latest in housing occupancy and costs in 2 tables and 2 charts

What’s the latest in housing occupancy and costs?

I collated data from the latest statistics released by the ABS and here are the key findings I found along with my insights presented in 2 charts and 2 tables:

On home buying and equity

• There were 1.1 million Australian dwelling transactions during 2020, of which 14% were for new homes and 86% for established abodes.
• There were some 9.732 million households across Australia in 2020, so some 11% of households either bought, sold, and moved or bought an additional home that year.
• First home buyers accounted for 37% of the sales, whilst changeover buyers, for 63%.
• The average price paid was $700,000 (remember these statistics cover fiscal 2020) and the average equity held by all buyers was 52%.
• According to the ABS first home buyers had a 35% equity stake in their purchase, whilst changeover buyers held a 60% share of the dwelling’s worth.
• Buyers are paying a premium – ranging from 7% to 12% - for a new dwelling when compared to something established.

Firstly, if this equity stake has remained stable since 2020 - and in contrast to recent media comments - recent buyers should be okay if (when) housing values take a bit of a slide.

Secondly, due to material shortages and rising labour costs, new homes over the past two years have become more expensive, making established digs (to many I would suggest) better value for money.

This in turn will contribute to a fall in new housing starts over the next couple of years.

On housing tenure and household occupancy

• Somewhat surprisingly 65% of recent changeover buyers have a mortgage.
• About half of the recent buyers live in a family household; whilst 30% are couples (with no dependent children) and 19% live alone.
• Detached houses are still the most popular housing purchase for changeover buyers (75%), less so for first-timers (67%).
• Nearly all first home buyers are aged between 25 and 44 years, whilst the majority (61%) of changeover buyers are over 45 years old. Some 23% of changeover buyers during 2020 were over 65.

It isn’t maybe that surprising that buyers have been taking advantage of record-low interest rates.

Actually, homeowners with full equity have been in decline for some time.

Meanwhile, detached housing remains the preferred dwelling type across Australia.

There have been clear trends in recent years, which is due to the rapid rise in detached house prices.

Because of this, more first home buyers are opting for something attached instead.

Interestingly, apartments seem to be an increasing choice as well.

About Michael Matusik Michael is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive