Property sales rates were higher in Australia’s regional locations than in its capital cities, according to a CoreLogic analysis.
The latest research from CoreLogic analyst Jade Harling has found that over the 12 months to July, four out of seven of the “rest of state” regions reported a higher turnover rate than their capital city counterpart.
According to Ms Harling, the disparity was most prevalent across NSW, with Sydney’s turnover rate at 4.1 per cent, compared with 5.6 per cent outside the capital city.
Ms Harling also reported that the regional areas of Tasmania saw the highest level of turnover of all regions (6.1 per cent), while the lowest turnover levels were reported in Western Australia (Perth 3.3 per cent, rest of state 3.3 per cent) and Darwin (3.5 per cent).
“Unsurprisingly, regional Tasmania has been one of the strongest housing markets for capital gains, with values up by 8.1 per cent over the past 12 months, while areas of Western Australia and Darwin have been among the weakest markets, with dwelling values down materially since peaking in 2014,” she said.
However, the research revealed that, overall, turnover rates in the year to June 2018 were 70 basis points lower year-on-year, down from 5.3 per cent to 4.7 per cent.
Ms Harling said that she was not surprised by the decline in overall turnover rates and pointed to softening in the credit and housing markets.
“The more pronounced decline in turnover rates over the year to July is hardly a surprise given current market conditions, with dwelling values softening each month now for the past 12 months, coupled with the lowest levels of new stock being added to the market seen since 2012 over the past six months, as confidence wanes and homes take longer to sell,” Ms Harling said.
She continued, “[The] high transactional cost to both purchase and sell property has likely added a further barrier to housing market participation.
“From the sell side, there are marketing costs, agent fees and commission, legal costs and potentially some costs associated with getting the property ready to present to market. From the buy side, stamp duty costs as percentage of the purchase price are a major barrier to entry, especially in the more expensive markets as well as the costs associated with building and pest inspections and conveyancing.”
Ms Harling concluded, “More recently, credit rationing has provided an additional dampening effect on housing activity.
“Given the potential differences across each market, the analysis takes a look at turnover across each of the states’ capital city and non-capital city regions, including the top five council areas across each state where the largest proportion of dwellings sold over the year.”