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2018 08--cl18 quarterly-economic_and_property_review

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The Australian Residential Property
Market and Economy
► Brisbane’s annual value growth has slowed from
+2.8% a year ago to +1.1% over the past year.
House values have risen by +1.2% over the past
year and unit values are +0.7% higher.

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2018 08--cl18 quarterly-economic_and_property_review

  1. 1. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. Quarterly Economic Review The Australian Residential Property Market and Economy June 2018 quarter Released August 2018
  2. 2. The Australian Residential Property Market and Economy Introduction 3 Housing Market 4 State-by-state breakdown 10 Mortgage Lending 34 Housing Supply 40 Demographic Overview 43 Household Finances 46 National Accounts 48 Inflation 49 Consumer Sentiment 50 Conclusion 51 About CoreLogic 53 Disclaimers 54 Contents
  3. 3. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. The Australian Residential Property Market and Economy Over the second quarter of 2018, national dwelling values have declined by -0.5%, matching the -0.5% fall in values over the March quarter. Throughout the 12 months to June 2018, national dwelling values have decline by -0.8%. Although a -0.8% fall isn’t overly large, it is the greatest annual fall in values since September 2012 when values had fallen -1.1% over the year. While the headline figure is recording falls largely due to declines in Sydney and Melbourne dwelling values, housing market conditions have also softened in most other capital cities. In fact, Brisbane, Adelaide and Hobart are the only capital cities where dwelling values remain at peak levels. In Perth and Darwin, values have been below their peak since 2014, while markets such as Sydney, Melbourne and Canberra have also entered a downturn. Even in Brisbane and Adelaide, where the pace of capital gains has been relatively sustainable, the rate of value growth has slowed over the past 12 months. Weaker housing market conditions at the national level are primarily being influenced by a downturn across the capital city regions; especially the largest housing markets, Sydney and Melbourne. Regional housing markets have seen value growth slow over the past year however, values remain in positive territory, at least at a macro level. Despite the more resilient conditions across regional markets, CoreLogic indices data has recently indicated a slowing of value growth in most regional NSW housing markets and on the Gold Coast while regional areas of Vic and the Sunshine Coast are seeing the rate of value growth accelerate. The current decline in values across the Australian housing market is quite different from previous downturn which have typically been triggered by a change in monetary policy (interest rates) or via an economic shock (such as the Global Financial Crisis). The current downturn has occurred on the back of changed credit regulation which has resulted in much tighter credit conditions. Since late 2014, the Australian Prudential Regulation Authority (APRA) has implemented a number of measures designed to remove some of the risks in the mortgage market and tighten lending policies. These changes have included, but not been limited to: calculating mortgage serviceability on a mortgage rate in excess of 7%, a 10% speed limit on annual investor credit growth for all lenders, limiting the flow of new lending for interest-only purposes to a maximum of 30%, requiring lenders to more accurately assess income and expenses and a more detailed understanding of borrower’s existing debts. The repercussions for borrowers of these changes to lending policies is that the availability of credit has been tightened. Investor and interest-only mortgages have become less readily available and those wanting to take out these types of mortgages are being charged higher mortgage rates. The amount that borrowers are able to borrow for a mortgage has been reduced and more information is required when applying for a mortgage. An immediate impact of these changes have been a sizeable fall in lending to investors who were, in Sydney and Melbourne in particular, a major source of mortgage demand over recent years. Although new housing finance commitments to investors is still well above long-term averages in NSW and Vic it has declined substantially from the peak levels. Australia has also seen a boom over recent years in new housing construction, particularly for units in Sydney, Melbourne and Brisbane where the number of apartments built reached unprecedented levels. Many of these new units had been purchased by investors ‘off the plan’ and we are seeing some evidence that more units are settling with a valuation lower than than the contract price and there is a heightened supply of rental accommodation which is leading to a slowing of rental growth. This has been apparent in Brisbane for some time but rental growth is now also slowing in Sydney and Melbourne. Low mortgage rates have not been enough to avoid recent dwelling value declines. While housing affordability is stretched in Sydney and Melbourne and falls are somewhat understandable considering the strong run up in prices, tighter new lending policies are likely a key driver of the housing market weakness. With a Royal Commission into the banking and financial services sector underway, it is reasonable to expect that getting a new mortgage is set to remain more challenging relative to previous years for some time. Given this, it is reasonable to anticipate that dwelling values are likely to continue to decline over the coming quarters, particularly in Sydney and Melbourne where investment demand has been the strongest and where affordability pressures are the most pronounced. it will be important to monitor the extent to which any weakness in Sydney and Melbourne infects other housing markets across the country. Introduction $7.6 trillion $2.6 trillion $1.8 trillion $0.995 trillion Value of Residential Property Value of Australian Superannuation Value of Listed Equities Value of Commercial Real Estate
  4. 4. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. -4.5% 1.0% 1.1% 1.1% -2.1% 12.7% -7.7% 2.3% -1.6% 2.2% -0.8% -10% -5% 0% 5% 10% 15% Change in dwelling values, 12 months to June 2018 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% Quarterly and annual change in national dwelling values Quarterly change Annual change The Australian Residential Property Market and Economy ► National dwelling values fell by -0.5% over the second quarter of 2018, with values also falling - 0.5% over the first quarter of the year. ► Combined capital city dwelling values fell -0.8% over the quarter while combined regional areas saw values increase 0.6%. ► Both capital city and regional markets are recording slower quarterly growth than they were a year ago. ► Values were lower over the quarter in Sydney (- 0.9%), Melbourne (-1.4%), Perth (-0.7%) and Darwin (-0.8%) while they increased in Brisbane (+0.3%), Adelaide (+0.9%), Hobart (+2.3%) and Canberra (+0.2%). ► Over the 2017-18 financial year, national dwelling values fell by -0.8% with combined capital city values -1.6% lower and combined regional market values 2.2% higher. ► The rate of value growth has slowed substantially over the past financial year, from +10.2% annually a year ago nationally, +11.1% a year ago across the combined capital cities and +6.4% a year ago across the combined regional markets. Housing Market ► Over the past 12 months, national dwelling values have fallen by -0.8%, their largest fall since September 2012. ► Across the combined capital cities the -1.6% annual fall is the largest since August 2012 while the 2.2% increase across the combined regional markets is the slowest growth since April 2015. ► Values increased over the past year in Melbourne (+1.0%), Brisbane and Adelaide (both +1.1%), Hobart (+12.7%) and Canberra (+2.3%). ► Dwelling values were lower over the past 12 months in Sydney (-4.5%), Perth (-2.1%) and Darwin (-7.7%). ► The -4.5% fall in Sydney dwelling values over the past year was a substantial slowdown from the +16.4% increase a year earlier. In fact, the -4.5% fall was the largest decline since March 2009 and the largest financial year fall on record. Over the past year, house values have fallen by -6.2% and unit values are -0.7% lower. ► The +1.0% annual increase in Melbourne dwelling values was the slowest rise since January 2013 and well down on the +13.0% increase a year earlier. Over the past year house values are +0.2% higher and unit values are +3.7% higher. National dwelling values declined by -0.5% over the first quarter of 2018 The annual change in dwelling values is lower than a year ago in all capital cities except for Perth
  5. 5. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. -1.6% 3.9% 5.1% 5.3% 1.9% 18.3% -2.4% 6.9% 1.6% 7.3% 2.7% -5% 0% 5% 10% 15% 20% Total returns over the 12 months to June 2018 The Australian Residential Property Market and Economy ► Brisbane’s annual value growth has slowed from +2.8% a year ago to +1.1% over the past year. House values have risen by +1.2% over the past year and unit values are +0.7% higher. ► The +1.1% annual increase in Adelaide dwelling values represents a slowdown from the +5.4% increase a year earlier. Over the past year, house values have increased +1.2% and unit values are +0.3% higher. ► Perth dwelling values fell by -2.1% over the past year however, this was a more moderate decline than the -2.6% a year ago. House values have fallen by -1.7% over the past year while unit values are -3.8% lower. ► The annual change in Hobart dwelling values (+12.7%) is fairly steady compared to last year (+12.8%). House values are +13.8% higher over the year and unit values are up +7.2%. ► Darwin dwelling values were -7.7% lower over the past year compared to a -2.6% fall a year earlier. House values have fallen by -4.9% over the year while unit values are -13.4% lower. ► Canberra annual dwelling value growth slowed from +7.8% a year ago to +2.3% over the past year. House values have increased +3.3% over the year while unit values are -0.8% lower. Total returns from housing are the lowest they’ve been since July 2012 ► The +2.7% total return from housing, which factors in the gross annualized rental yield as well as annual capital gains was the lowest annual return since July 2012. ► Total returns have fallen substantially over the past year; a year ago they were recorded at +14.5%. ► Total returns across the combined capital cities were recorded at +1.6% over the past year, their lowest returns since June 2012. ► Hobart was the only capital city in which double digit returns were generated over the past 12 months. ► Returns across all capital cities were lower over the past year than they were a year ago highlighting the impact of slowing value growth and weakening rental growth. ► Sydney’s total returns have fallen from +20.1% a year ago to just -1.6%, the lowest they’ve been since February 2009. ► Over the past five years, total returns nationally have been recorded at 10.1% p.a. while Sydney (12.8% p.a.), Melbourne (11.7% p.a.) and Hobart (12.3% p.a.) have generated much higher returns, while returns in Perth (2.2% p.a.) and Darwin (0.8% p.a.) have been much lower. Housing Market
  6. 6. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 89.4% 86.8% 19.7% 22.0% 3.8% 42.8% -2.4% 31.5% 61.7% 23.7% 52.6% -20% 0% 20% 40% 60% 80% 100% Change in dwelling values, January 2009 to June 2018 -4.8% -2.0% 0.0% 0.0% -11.4% 0.0% -22.2% -0.4% -2.2% 0.0% -1.3% -25% -20% -15% -10% -5% 0% 5% Change in dwelling values from market peak to June 2018 The Australian Residential Property Market and Economy ► Dwelling values nationally are now -1.3% lower than their September 2017 peak. ► While combined capital city dwelling values are - 2.2% lower than their September 2017 peak, combined regional market values are continuing to rise to new highs. ► Brisbane, Adelaide and Hobart are the only individual capital cities in which values are currently at historic highs. ► After values peaked in July 2017 in Sydney, they have fallen by -4.8% over the space of 11 months. ► Melbourne dwelling values peaked in November 2017 and they have since fallen by -2.0% in 7 months. ► Perth dwelling values currently sit -11.4% lower than their peak which occurred all the way back in June 2014. ► Darwin dwelling values reached an historic-high in May 2014 and they have since fallen by -22.2%. ► Canberra dwelling values have declined over the past two months and are currently -0.4% lower than their peak. ► In most of the capital cities where values are falling the declines have started fairly recently however, these declines are anticipated to continue for some time. Housing Market Many capital cities are now seeing values which are below their peak ► In 2008, during the Global Financial Crisis, capital city dwelling values fell by -7.9% between March 2008 and January 2009, but with stimulus measures such as lower interest rates and a ‘boost’ to first home buyer grants, dwelling values began to rise thereafter. ► As has been the case with the most recent growth phase, since the global financial shock it has been the two largest capital cities that have seen substantial value growth while other capital cities have recorded relatively moderate increases in values. ► The relative strength of the Sydney and Melbourne economies, strong migration into those cities and a relatively low supply of stock available for sale has supported this growth in dwelling values while these conditions have generally not been apparent in other capital cities. ► Note that although Sydney and Melbourne have recorded the strongest growth over this period, values are now falling in both of these cities with declines more rapid in Sydney. ► Outside of Sydney and Melbourne, growth has generally been minimal over the period, except in Hobart where value growth has ramped-up over the past three years. Housing market growth conditions have been significantly skewed towards Sydney and Melbourne over the past decade
  7. 7. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Monthly number of settled dwelling sales Monthly sales 6 month average $1,012,368 $821,463 $537,647 $466,569 $485,296 $460,609 $494,716 $673,988 $694,764 $373,586 $573,216 $752,625 $574,304 $386,685 $328,842 $400,762 $355,554 $322,988 $437,596 $575,685 $343,536 $517,988 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra Combined capitals Combined regions National Median house and unit values as at June 2018 Units Houses The Australian Residential Property Market and Economy ► At the end of June 2018, the national median value of a house was recorded at $573,216 and the median unit value was $517,988, a gap of 10.7% ► When you split the results individually across the combined capital cities and combined regional markets, the gap between house and unit values is wider in the capital cities (20.7%) and narrower in the regional markets (8.7%). ► Across the individual capital cities, the premium for houses over units is recorded at: 34.5% in Sydney, 43.0% in Melbourne, 39.0% in Brisbane, 41.9% in Adelaide, 21.1% in Perth, 29.5% in Hobart, 53.2% in Darwin and 54.0% in Canberra. ► In dollar terms the gaps between house and unit prices are recorded at: $259,743 in Sydney, $247,159 in Melbourne, $150,962 in Brisbane, $137,727 in Adelaide, $84,534 in Perth, $105,054 in Hobart, $171,728 in Darwin and $236,392 in Canberra. ► Sydney houses are much more expensive than houses elsewhere however, the median value for units in Sydney is more expensive than the median value for houses in all other capital cities except Melbourne. ► Similarly, based on median values, Melbourne units are more expensive than houses in all other capital cities except for Sydney and Canberra. Housing Market Overview Houses continue to show a premium over units across the country ► It is estimated that over the 12 months to June 2018 there were 459,964 settled dwelling sales nationwide. ► Compared to sales over the 12 months to June 2017, the number of settled transactions was -8.8% lower. Annual sales are tracking -16.2% lower than the recent peak recorded over the twelve months ending September 2015. ► The combined capital cities recorded an estimated 285,416 settled sales over the year which accounted for 62% of total sales nationally. ► Capital city transactions were -11.2% lower over the past year than the previous year while regional market transactions were unchanged. ► Across the individual capital cities, the annual change in settled transactions was recorded at: - 14.3% in Sydney, -14.0% in Melbourne, -12.8% in Brisbane, +1.0% in Adelaide, -0.4% in Perth, -9.6% in Hobart, -6.9% in Darwin and -11.5% in Canberra. ► Note that these figures are estimates for settled sales; off-the-plan sales will typically settle upon completion of the project, at that time these sales will be counted at their contract date. ► Given this, it is expected that recent years of sales activity will be revised higher once these settlements occur. Settled sales transactions have continued to trend lower
  8. 8. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 0 10 20 30 40 50 60 70 80 90 Combined capital cities days on market -9% -8% -7% -6% -5% -4% -3% -2% -1% 0% Combined capital cities vendor discounting levels ► Vendor discounting measures the difference between the initial list price and the ultimate selling price of properties which sell by private treaty for less than their original list price. ► Vendors that sold their homes below the initial list price are currently discounting them by 6.0% compared to discounts of 5.8% a year ago. ► The current level of discounting across the individual capital cities is recorded at: 6.5% in Sydney, 4.9% in Melbourne, 5.5% in Brisbane, 5.8% in Adelaide, 8.4% in Perth, 7.2% in Hobart, 10.5% in Darwin and 3.6% in Canberra. ► Brisbane, Adelaide and Canberra were the only capital cities in which discounting levels are currently lower than they were a year ago. The Australian Residential Property Market and Economy Housing Market Overview Discounting levels are starting to trend a little higher ► The days on market figure measures the average time from the first listing date to the contract date for properties sold by private treaty. ► Combined capital city homes are currently taking an average of 43 days to sell compared to 40 days at the same time a year ago. ► At an individual capital city level, the typical days on market is recorded at 46 days in Sydney, 31 days in Melbourne, 59 days in Brisbane, 46 days in Adelaide, 69 days in Perth, 29 days in Hobart, 65 days in Darwin and 46 days in Canberra. ► The typical days on market has reduced over the past year in Hobart (-20 days) and Darwin (-2 days) while it is unchanged in Melbourne. ► Sydney (+12 days), Brisbane (+9 days), Adelaide (+2 days), Perth (+3 days) and Canberra (+3 days) all recorded an increase in days on market over the past year. Properties are starting to take longer to sell
  9. 9. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 3.5% 3.7% 3.9% 4.1% 4.3% 4.5% 4.7% 4.9% Gross rental yields, National 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Annual change in national dwelling rents The Australian Residential Property Market and Economy Housing Market Overview ► Rental rates increased by 0.3% over the June 2018 quarter and were 1.8% higher over the past year. ► Annual rental growth is the slowest it has been since March 2017 and lower than the 2.4% growth recorded a year ago. ► Combined capital city rents increased by 0.3% over the quarter to be 1.4% higher over the past year. ► Combined regional market rents were 0.4% higher over the quarter and recorded an increase more than double that of the capital cities (3.1%) over the past year. ► Over the quarter, rents fell in Sydney (-0.3%) and Darwin (-1.0%) and increased in Melbourne (+0.9%), Brisbane (+0.3%), Adelaide (+0.4%), Perth (+0.3%), Hobart (+1.9%) and Canberra (+1.3%). ► Over the past 12 months, rental rates fell in Perth (-0.2%) and Darwin (-1.7%) and increased in Sydney (+0.1%), Melbourne (+3.1%), Brisbane (+1.2%), Adelaide (+2.2%), Hobart (+10.7%) and Canberra (+4.5%). Rental growth has continued to slow over recent months ► At the end of June 2018, the gross rental yield nationally was recorded at 3.7%; 3.4% across the combined capital cities and 4.9% across the combined regional markets. ► Houses (3.5%) have lower gross yields than units (4.2%) nationally as well as across the combined capital cities (3.2% vs. 4.1%) and combined regional markets (4.8% vs. 5.2%). ► Across Australia, gross rental yields have softened over recent years however, they have started to lift marginally over recent months as values have fallen. ► Throughout the individual capital cities, gross rental yields are currently recorded at: 3.2% in Sydney, 3.0% in Melbourne, 4.4% in Brisbane, 4.2% in Adelaide, 3.9% in Perth, 4.9% in Hobart, 5.7% in Darwin and 4.6% in Canberra. ► Gross rental yields are currently higher than they were a year ago in all capital cities except for Perth and Darwin. ► Although rental growth is slowing in many capital cities, it is expected to remain stronger than value changes and as a result yields are expected to continue to firm over the coming months. With dwelling values falling and rents continuing to rise, rental yields have started to lift
  10. 10. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. Value growth is slowing across NSW • Over the second quarter of 2018, Sydney dwelling values have fallen by -0.9% and values across regional NSW have increased by 0.8%. • Over the past 12 months Sydney values have fallen by -4.5% while regional NSW values have increased by 3.2%. By comparison, 12 months ago Sydney values had increased by 16.4% and regional NSW values had increased by 11.9%. • While the Sydney market has been seeing values decline since July last year, values are still broadly rising outside of Sydney however, over recent months many of the regions adjoining Sydney have also started to experience value declines. While dwelling values fall for the more expensive housing stock, lower valued stock continues to rise • Over the past year, dwelling values for the most affordable 25% of NSW housing stock has increased by 4.7% while the middle 50% of housing stock has fallen -0.9% and the most expensive 25% has recorded a decline of -6.1%. • In Sydney, the most affordable 25% of properties have fallen in value by -1.0% over the past year compared to a -3.0% fall across the middle 50% of the market and a much larger -7.3% fall across the 25% of most expensive properties. • Regional NSW dwelling values have increased 4.7% across the most affordable 25% of properties over the past year, are 4.5% higher across the middle 50% of properties and have increased by a lower 2.2% across the most expensive 25% of properties. Settled transaction volumes in NSW are trending lower • Over the past three months there was 35,038 house and unit transactions settled in Sydney which was -9.9% lower than over the same three month period last year. • In Sydney, there were 20,601 settlements over the three months to June 2018 which was -12.1% lower than the same period in 2017. • There were 14,437 house and unit sales settled in regional NSW over the three months to June 2018 which was -6.6% lower than the number over the second quarter of 2017. Rental growth is slowing in Sydney and remains fairly steady in regional NSW • Over the second quarter of 2018, Sydney rents fell by -0.3% while they increased by 0.2% over the period in regional NSW. • Throughout the past year, Sydney rental growth has slowed from 3.9% to 0.1% and in regional NSW annual rental growth was 3.4% a year ago and has slowed marginally to 2.8% over the past year. • Rental rates in Sydney are now -0.4% lower than they were at their peak while in regional NSW rents are -0.1% lower than their peak. With values falling faster than rents, yields are increasing from historic lows • Gross rental yields in Sydney were recorded at 3.21% in June 2018, up from 3.05% in June 2017. • Regional NSW gross rental yields have fallen from 4.61% in June 2017 to 4.50% in June 2018. -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Annual change in dwelling values Sydney Regional NSW The Australian Residential Property Market and Economy New South Wales
  11. 11. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. The Australian Residential Property Market and Economy Growth in NSW state final demand has slowed but remains quite strong • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • State final demand in NSW increased by 0.7% over the March 2018 quarter and although that was the slowest quarterly growth in a year, it was much higher than the 0.1% increase in March 2017. • Over the past 12 months, NSW state final demand has increased by 3.7% which is the fastest annual growth since December 2016. NSW’s labour force is much stronger than most other states and territories • The NSW trend unemployment rate was recorded at 4.8% in June 2018 which is the same as it was a year ago. • Over the past 12 months, NSW has created 143,912 jobs. • Based on the 143,912 jobs created over the past year, total employment has increased by 3.7% and 45.0% of all jobs created nationally last year were in NSW. Population growth in NSW remains strong however, it has started to slow • Over the 12 months to December 2017, the population of NSW increased by 116,823 persons, the lowest it has been since March 2016. • Looking at the components, the 116,823 person population increase was comprised of 43,144 from natural increase, 92,978 persons from net overseas migration and there was a loss of 19,299 persons from net interstate migration. • Annual natural increase was the highest it has been since September 2016, net overseas migration was the lowest it has been September 2016 and the net outflow of residents was the largest it has been since March 2009. Approvals for units are trending lower while house approvals rise • In May 2018, there were 5,727 dwellings approved for construction in NSW which was 7.3% higher over the month and 6.6% higher year-on-year. • Over the month there were 2,862 houses approved for construction, an increase of 20.1% over the month and a 1.0% increase year-on-year. • Recent data points to an easing in unit approvals with 2,865 approvals in May 2018 the fewest since December 2017 however, year-on-year approvals are 13.0% higher. New South Wales
  12. 12. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. A very high number of dwellings were under construction across NSW at the end of March 2018 • According to the ABS there were 87,266 dwellings under construction across NSW at the end of March 2018, which was only slightly lower than the historic high of 89,162 dwellings over the previous quarter. • The 87,266 is split between: 20,041 new houses, 66,054 new units and 1,171 non-new dwellings. • The number of new houses under construction increased to its highest volume since September 1989 over the quarter while the number of new units under construction fell however, it was the third highest figure on record. Housing finance commitments in NSW rebound in May 2018 • The total value of housing finance commitments in NSW during May 2018 was $14.4 billion which was 19.4% higher over the month but -8.1% lower from its recent peak. • The $14.4 billion was split between: $2.7 billion in owner occupier refinances, $5.9 billion in owner occupier new lending and $5.8 billion in lending to investors. • Although the value of lending rebounded over the month, all segments of lending across NSW are trending lower and as a share of total lending investors have shrunk to their smallest share since April 2016. 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 No of dwellings under construction, NSW Houses Units Source: CoreLogic, ABS $0 $1 $2 $3 $4 $5 $6 $7 $8 $billion Housing finance commitments, NSW Owner occupier refinances (3 mth average) Owner occupier non-refinances (3 mth average) Investors (3 mth average) Source: CoreLogic, ABS The Australian Residential Property Market and Economy New South Wales
  13. 13. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. Dwelling values are increasing at their slowest annual pace since January 2013 • Melbourne dwelling values fell by -1.4% over the second quarter of 2018 which was their largest quarterly fall since February 2012 and regional Vic values increase by 1.8%. • Over the 2017-18 financial year, Melbourne dwelling values increase by 1.0%, their slowest annual rate of growth since January 2013, while in regional Vic values increased by 5.0%, their fastest annual rate of growth since September 2017. • Although value growth has slowed rapidly over the past year in Melbourne, regional Vic continues to see comparatively stronger growth, driven by housing being much more affordable than it is in Melbourne. Values falls are confined to the upper quartile of the market • Over the past year, dwelling values for the most affordable 25% of Vic housing stock has increased by 4.5% while the middle 50% of housing stock has increased 5.0% and the most expensive 25% has recorded a decline of -1.7%. • In Melbourne, the most affordable 25% of properties have increased in value by 9.3% over the past year compared to a 3.3% increase across the middle 50% of the market and a -2.5% fall across the 25% of most expensive properties. • Regional Vic dwelling values have increased 4.5% across the most affordable 25% of properties over the past year, are 5.0% higher across the middle 50% of properties and have increased by 5.6% across the most expensive 25% of properties. There’s been a significant fall in sales transactions over the past 12 months • Over the past three months there was 27,630 house and unit settlements in Vic which was - 11.1% lower than over the same three month period last year. • In Melbourne, there were 20,247 transactions settled over the three months to June 2018 which was -14.1% lower than the same period in 2017. • There were 7,383 house and unit settlements in regional Vic over the three months to June 2018 which was -1.8% lower than the number over the second quarter of 2017. Rental growth has accelerated in regional Vic while it has slowed in Melbourne • Over the second quarter of 2018, Melbourne rents fell by 0.9% while they increased by 0.7% over the period in regional Vic. • Throughout the past year, Melbourne rental growth has slowed from 4.4% to 3.1% and in regional Vic annual rental growth was 2.1% a year ago and has increased to 3.4% over the past year. • Both Melbourne and regional Vic are seeing rental rates continue to rise however, there is a clear slowing of rental growth in Melbourne and an acceleration in regional Vic. In Melbourne, gross rental yields are slowly rising from their historic lows • Gross rental yields in Melbourne were recorded at 3.00% in June 2018, up from 2.97% a year earlier. • Regional Vic gross rental yields have fallen from 4.75% in June 2017 to 4.41% in June 2018. 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% Gross rental yields Melbourne Regional Vic -5% 0% 5% 10% 15% Annual change in rents Melbourne Regional Vic 0 2,000 4,000 6,000 8,000 10,000 12,000 Monthly house and units sales with 3 month average, Vic Houses Units -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% Annual change in Vic dwelling values across market segments Low 25% Middle 50% Top 25% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Annual change in dwelling values Melbourne Regional Vic The Australian Residential Property Market and Economy Victoria
  14. 14. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Houses and units approved for construction, Vic Houses (3 mth average) Units (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS -40,000 -20,000 0 20,000 40,000 60,000 80,000 100,000 Components of annual population growth, Vic Natural increase Net overseas migration Net interstate migration Source: CoreLogic, ABSSource: CoreLogic, ABS -8% -6% -4% -2% 0% 2% 4% 6% 8% Vic annual change in employment (trend) Source: CoreLogic, ABS 0% 2% 4% 6% 8% 10% 12% 14% Vic unemployment rate (trend) Source: CoreLogic, ABS Growth in state final demand for Vic over the June 2018 quarter was the strongest in a number of years • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • State final demand in Vic increased by 1.9% over the March 2018 quarter which was the strongest quarterly increase since a 2.3% increase in March 2013. • Over the past 12 months, Vic state final demand has increased by 4.9% which was the greatest growth of all states and territories. The unemployment rate in Vic has fallen substantially over the past year • Vic’s trend unemployment rate was recorded at 5.5% in June 2018 which was down from 6.1% a year earlier. • Vic has created 64,000 jobs over the 12 months to June 2018. • Based on the 64,000 jobs created over the past year, total employment has increased by 2.0% and 20.0% of all jobs created nationally last year were in Vic. Vic remains the nation’s population growth powerhouse but growth has started to slow • Vic’s population increased by 143,420 persons over the 2017 calendar year which was the state’s smallest increase in population since December 2015 however, it still accounted for 37.0% of the nation’s population increase • Looking at the components, the 143,420 person population increase was comprised of 42,312 from natural increase, 84,722 persons from net overseas migration and 16,386 persons from net interstate migration. • While natural increase was at an historic high level, net overseas migration was the lowest it’s been since September 2016 and net interstate migration has been falling for three consecutive quarters and is the lowest it’s been since March 2016. While unit approvals are well down from their peak, house approvals are climbing • In May 2018, there were 6,435 dwellings approved for construction in Vic which was 11.8% higher over the month and 18.3% higher year-on-year. • Over the month there were 3,714 houses approved for construction, an increase of 9.7% over the month and a 7.9% increase year-on-year. • While unit approvals are down from their peak, the 2,721 approvals in May 2018 was 14.8% higher over the month and 36.4% higher year-on-year. -3% -1% 1% 3% 5% 7% 9% Quarterly and annual change in state final demand - Vic Quarterly change Annual change Source: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy Victoria
  15. 15. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. An historic high number of dwellings are under construction across Vic • According to the ABS there were 73,290 dwellings under construction across Vic at the end of March 2018, which was an historic high. • The 73,290 is split between: a record high 23,804 new houses, an historic high 48,971 new units and 515 non-new dwellings. • There was a significant rebound in the number of dwellings under construction across the state over the quarter with the number under construction now 7.6% higher than the previous record high. Housing finance commitments rose across all segments in May 2018 • The total value of housing finance commitments in Vic during May 2018 was $10.7 billion which was 26.0% higher over the month and a new record high. • The $10.7 billion was split between: $2.3 billion in owner occupier refinances, $5.0 billion in owner occupier new lending and $3.5 billion in lending to investors. • While all segments of lending have rebounded, lending to investors as a share of total lending has trended much lower over recent months. $0 $1 $2 $3 $4 $5 $6 $billion Housing finance commitments, Vic Owner occupier refinances (3 mth average) Owner occupier non-refinances (3 mth average) Investors (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS 0 10,000 20,000 30,000 40,000 50,000 60,000 No of dwellings under construction, Vic Houses Units Source: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy Victoria
  16. 16. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 4.0% 4.2% 4.4% 4.6% 4.8% 5.0% 5.2% 5.4% 5.6% 5.8% Gross rental yields Brisbane Regional Qld -5% 0% 5% 10% 15% Annual change in rents Brisbane Regional Qld 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Monthly house and units sales with 3 month average, Qld Houses Units -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% Annual change in Qld dwelling values across market segments Low 25% Middle 50% Top 25% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% Annual change in dwelling values Brisbane Regional Qld Slow growth in dwelling values continues across Qld • Over the second quarter of 2018, Brisbane dwelling values increased by 0.3% while across regional Qld values fell by -0.2%. • Brisbane dwelling values increased by 1.1% over the 2017-18 financial year while in regional Qld values increased by a slower 0.3%. • Annual value growth in each of Brisbane and regional Qld has slowed from a year ago and while values continue to rise it is at a very slow pace. The most affordable properties in Qld have recorded values fall over the past year while more expensive stock is seeing values rise • Dwelling values across the 25% of most affordable housing stock in Qld has fallen by -2.0% over the past year compared to a 0.6% increase across the middle 50% of housing stock and a 1.7% increase across the most expensive 25% of housing stock. • In Brisbane, values have increased by 0.9% over the past year across both the most affordable and the most expensive 25% of properties in the city and they have increased by 1.2% across the middle 50% of the market. • Regional Qld dwelling values have fallen by -3.1% across the most affordable 25% of properties over the past year, are -0.8% lower across the middle 50% of properties and have increased by 2.2% across the most expensive 25% of properties. Transaction volumes are substantially lower over the past year • There were 23,513 dwellings sales across Qld over the three months to June 2018 which was -14.4% fewer than the same period in 2017. • The number of settled sales in Brisbane was - 16.0% lower over the past three months compared to the same period in 2017 with 11,068 sales • There were 12,445 house and unit sales in regional Qld over the three months to June 2018 which was -12.9% lower than the number over the second quarter of 2017. Rental growth has accelerated across the state over the past year • In Brisbane, rental rates increased by 0.3% over the three months to June 2018 while rents increased by 0.6% over the same period in regional Qld. • Rental growth in Brisbane has accelerated over the past year from a -0.4% annual decline a year ago to a 1.2% increase over the past year, the largest annual increase since July 2015. • In regional Qld, rents have increased by 3.3% over the past year, their fastest rate of growth since September 2012. Rental yields have increased slightly over the past year • Gross rental yields in Brisbane have increased from 4.39% in June 2017 to 4.43% currently. • In regional Qld, gross rental yields are currently recorded at 5.29%, up from 5.26% a year ago. The Australian Residential Property Market and Economy Queensland
  17. 17. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Houses and units approved for construction, Qld Houses (3 mth average) Units (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Components of annual population growth, Qld Natural increase Net overseas migration Net interstate migration Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS -4% -2% 0% 2% 4% 6% 8% 10% Qld annual change in employment (trend) Source: CoreLogic, ABS 0% 2% 4% 6% 8% 10% 12% Qld unemployment rate (trend) Source: CoreLogic, ABSSource: CoreLogic, ABS Growth in state final demand in Qld has slowed over the past year • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • Over the March 2018 quarter, state final demand in Qld has increased by 0.5% which was down from 1.1% the previous quarter and up from 0.2% the previous year. • State final demand increased by 2.9% over the past year its slowest annual growth since December 2016. Qld’s job creation is quite strong but the unemployment rate remains stubbornly high • The trend unemployment rate in Qld was reported at 6.1% in June 2018, slightly higher than the 6.0% recorded a year earlier. • Over the past 12 months, Qld has created 62,739 jobs. • Based on 62,739 jobs created over the past year, total employment has increased by 2.6% which has accounted for 19.6% of all jobs created nationally. Qld has led the nation in net interstate migration over the past year • The population of Qld increased by 81,461 persons over the 12 months to December 2017 with Qld accounting for 21.0% of the nation’s population growth over the year. • The 81,461 person increase in population was split between: natural increase of 29,602 persons, net overseas migration of 29,349 persons and net interstate migration of 22,510 persons. • Over the year, natural increase was the lowest it’s been since June 2006, net overseas migration was the lowest it’s been since June 2016 and net interstate migration has increased for 12 consecutive quarters and is at its highest level since September 2007. Dwelling approvals are falling across Qld • There were 2,840 dwellings approved for construction across the state in May 2018 which was -18.3% fewer over the month and a decline of - 24.6% year-on-year. • There were 1,971 houses and 869 units approved for construction over the month. • House approvals in May were 1.8% higher over the month but -16.1% lower year-on-year while unit approvals were -43.6% lower over the month and - 38.7% lower year-on-year. -4% -2% 0% 2% 4% 6% 8% 10% 12% Quarterly and annual change in state final demand - Qld Quarterly change Annual change Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy Queensland
  18. 18. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. The number of dwellings under construction increased over the quarter • At the end of March 2018 there were 33,813 dwellings under construction in Qld which was 2.6% more than at the end of 2017. • The 33,813 dwellings under construction was split between: 10,734 new houses, 22,905 new units and 174 non-new dwellings. • The number of new houses under construction was the highest it has been since December 2008 while the number of units under construction was slightly higher than the previous quarter. The value of housing finance commitments showed a substantial rise over the month • In May 2018 there was $5.2 billion worth of housing finance commitments in Qld which was 24.1% higher over the month but -1.7% lower year-on- year. • The $5.2 billion in housing finance commitments was split between: $1.0 billion for owner occupier refinances, $2.7 billion for owner occupier new lending and $1.5 billion to investors. • Each segment of lending recorded an increase over the month however, owner occupier new lending and investor lending was lower than it was a year earlier. $0 $1 $1 $2 $2 $3 $3 $4 $billion Housing finance commitments, Qld Owner occupier refinances (3 mth average) Owner occupier non-refinances (3 mth average) Investors (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 No of dwellings under construction, Qld Houses Units Source: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy Queensland
  19. 19. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. Values continue to rise albeit at a very slow pace • Adelaide dwelling values increased by 0.9% over the June 2018 quarter while in regional SA values increased by 1.3%. • Over the past 12 months, Adelaide dwelling values are 1.1% higher compared to a -0.1% fall in values across regional SA. • The annual rate of value change is slower over the year in Adelaide and higher in regional SA with changes over the year to June 2017 recorded at 5.4% and -0.5% respectively. The middle 50% of housing stock across SA has recorded the strongest value growth over the past year • Across SA, dwelling values for the most affordable 25% of properties have increased by 0.3% over the past year compared to a 1.3% increase across the middle 50% of housing stock and a 1.1% increase for the most expensive 25% of housing stock. • In Adelaide, values have increased by 1.4% over the past year for the most affordable properties in the city, they have increased by 1.7% across the middle 50% of the market and the most expensive properties have increased in value by 0.8%. • Regional SA dwelling values have increased by 1.4% across the most affordable 25% of properties over the past year, are -0.4% lower across the middle 50% of properties and have fallen by -1.2% across the most expensive 25% of properties. Transaction volumes are marginally lower over the past year • There were 9,210 dwellings sales across SA over the three months to June 2018 which was -0.6% fewer than the same period in 2017. • With 6,965 settled sales, the number of sales in Adelaide was -3.6% lower over the past three months compared to the same period in 2017. • There were 2,245 house and unit sales in regional SA over the three months to June 2018 which was 9.8% higher than the number over the second quarter of 2017. Rental growth has accelerated across the state over the past year however, it has slowed from recent peaks • Adelaide rents increased by 0.4% over the June 2018 quarter while in regional SA rental rates rose by 0.5% over the quarter. • Over the past 12 months, Adelaide rents increased by 2.2% and rents in regional SA were 4.6% higher. • The 2.2% annual increase in Adelaide rents was higher than the 1.9% a year ago but down from the recent peak of 3.2% in January 2018 while rental growth in regional SA has slowed from 7.1% in April 2018. Gross rental yields have softened over recent months in SA • Over the 12 months to June 2018, gross rental yields in Adelaide have increased from 4.23% to 4.24%. • In regional SA, gross rental yields were recorded at 5.92% in June 2017 and 6.12% in June 2018. 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% Gross rental yields Adelaide Regional SA -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Annual change in rents Adelaide Regional SA 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Monthly house and units sales with 3 month average, SA Houses Units -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Annual change in SA dwelling values across market segments Low 25% Middle 50% Top 25% -10% -5% 0% 5% 10% 15% 20% 25% Annual change in dwelling values Adelaide Regional SA The Australian Residential Property Market and Economy South Australia
  20. 20. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. The annual change in state final demand for SA is much lower than a year ago • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • SA state final demand fell by -0.2% over the March 2018 quarter, its weakest result since June 2015. • State final demand increased by 2.1% over the past year its slowest annual growth since December 2016. The trend unemployment rate in SA is starting to fall • In May 2018, the trend unemployment rates for SA was recorded at 5.7% which was the lowest it has been since October 2012 and down from 6.6% a year ago. • There have been 19,411 new jobs created in SA over the past 12 months. • The 19,411 increase in employment over the past year equates to a 2.4% increase in employment with SA accounting for 6.0% of job creation nationally over the past year. The loss of residents from interstate migration is starting to slow in SA • SA’s population increased by 10,671 persons over the 2017 calendar year with SA accounting for 2.8% of the nation’s population increase. • The 10,671 person increase in population was split between: natural increase of 4,995 persons, net overseas migration of 11,747 persons and a loss from net interstate migration of 6,071 persons. • Over the year, net overseas migration fell from 12,107 persons the previous year while the loss of residents from net interstate migration was the lowest it has been since December 2015. In SA, dwelling approvals have trended higher • There were 1,528 dwellings approved for construction in SA during May which was 57.0% greater than the previous month and 5.7% higher than a year ago. • There were 829 houses and 699 units approved for construction over the month. • In May 2018, house approvals were 29.3% higher over the month and 6.4% higher year-on-year while unit approvals were 110.5% higher over the month and 5.0% higher year-on-year. 0 200 400 600 800 1,000 1,200 Houses and units approved for construction, SA Houses (3 mth average) Units (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS -10,000 -5,000 0 5,000 10,000 15,000 20,000 Components of annual population growth, SA Natural increase Net overseas migration Net interstate migration Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% SA annual change in employment (trend) Source: CoreLogic, ABS 0% 2% 4% 6% 8% 10% 12% 14% SA unemployment rate (trend) Source: CoreLogic, ABSSource: CoreLogic, ABS -4% -2% 0% 2% 4% 6% 8% 10% 12% Quarterly and annual change in state final demand - SA Quarterly change Annual change Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy South Australia
  21. 21. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. $0 $200 $400 $600 $800 $1,000 $million Housing finance commitments, SA Owner occupier refinances (3 mth average) Owner occupier non-refinances (3 mth average) Investors (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 No of dwellings under construction, SA Houses Units Source: CoreLogic, ABSSource: CoreLogic, ABS An historic high number of dwellings are currently under construction across SA • There were 10,268 dwellings under construction across SA at the end of the March 2018 quarter which was an historic high. • The 10,268 dwellings under construction was split between: 4,850 new houses, 5,348 new units and 71 non-new dwellings. • There was a record high number of units under construction at the end of the quarter while houses under construction were slightly higher over the quarter and remain elevated. There was a rise in the value of housing finance commitments in May 2018 • In May 2018 there was $1.6 billion worth of housing finance commitments in SA which was 18.6% higher over the month but -3.7% lower year-on- year. • The $1.6 billion in housing finance commitments was split between: $366.6 million for owner occupier refinances, $845.9 million for owner occupier new lending and $388.0 million to investors. • The value of lending to each category rose over the month while over the year each owner occupier segment recorded an increase in commitments while commitments by investors were down almost 20%. The Australian Residential Property Market and Economy South Australia
  22. 22. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% Gross rental yields Perth Regional WA -10% -5% 0% 5% 10% 15% Annual change in rents Perth Regional WA 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Monthly house and units sales with 3 month average, WA Houses Units -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Annual change in WA dwelling values across market segments Low 25% Middle 50% Top 25% -20% -10% 0% 10% 20% 30% 40% Annual change in dwelling values Perth Regional WA Although values are still falling the rate of decline has slowed over the past year in Perth • Over the June 2018 quarter, Perth dwelling values have fallen by -0.7% while in regional WA values were -0.1% lower. • Perth dwelling values have fallen by -2.1% over the past year while in regional WA values have recorded a larger -3.3% fall. • Compared to the annual change in dwelling values over the year to June 2017, the rate of decline has slowed in Perth this year and in regional WA the rate of decline has accelerated. The most expensive properties in WA have seen the most moderate value declines • Across WA, dwelling values for the most affordable 25% of properties and the middle 50% of properties have each fallen by 3.8% over the past year compared to a -2.1% fall for the most expensive 25% of housing stock. • In Perth, values have fallen by -4.5% over the past year for the most affordable properties in the city, they have fallen by -3.4% across the middle 50% of the market and the most expensive properties have fallen in value by -1.9%. • Regional WA dwelling values have fallen -4.2% across the most affordable 25% of properties over the past year, are -4.1% lower across the middle 50% of properties and have fallen by -4.3% across the most expensive 25% of properties. Sales volumes are marginally lower than they were a year ago • Over the June 2018 quarter there were 9,561 settled sales across WA which was -0.4% fewer than the same period in 2017. • In Perth there were 7,303 settled sales over the past three months which was -2.0% lower than the June 2017 quarter. • Regional WA sales volumes were 4.8% higher over the past quarter than they were a year ago with 2,258 settled sales over the June 2018 quarter. Although rents continue to fall, the rate of decline has slowed • Over the June 2018 quarter, rental rates have increased by 0.3% in Perth and they have fallen by -0.9% in regional WA. • Perth rental rates have fallen by -0.2% over the past 12 months and in regional WA rental rates are -0.9% lower. • The -0.2% annual decline in rents in Perth is the strongest annual change in rents since March 2013 while the -0.9% fall in regional WA is an improvement from the -2.4% annual fall in June 2017. Yields are softening in Perth while they rise in regional WA • Over the 12 months to June 2018, gross rental yields in Perth have fallen from 3.99% to 3.91%. • In regional WA, gross rental yields were recorded at 5.52% in June 2017 and increased to 5.65% in June 2018. The Australian Residential Property Market and Economy Western Australia
  23. 23. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 0 500 1,000 1,500 2,000 2,500 Houses and units approved for construction, WA Houses (3 mth average) Units (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS -20,000 -10,000 0 10,000 20,000 30,000 40,000 50,000 60,000 Components of annual population growth, WA Natural increase Net overseas migration Net interstate migration Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS -4% -2% 0% 2% 4% 6% 8% WA annual change in employment (trend) Source: CoreLogic, ABS 0% 2% 4% 6% 8% 10% 12% WA unemployment rate (trend) Source: CoreLogic, ABSSource: CoreLogic, ABS -15% -10% -5% 0% 5% 10% 15% 20% Quarterly and annual change in state final demand - WA Quarterly change Annual change Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS State final demand recorded a large fall over the March 2018 quarter • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • WA state final demand fell by -1.1% over the March 2018 quarter, its weakest result since September 2016. • State final demand increased by 0.8% over the past year which was slower growth than the previous quarter (+1.5%) but a significant improvement on the -6.7% fall a year earlier. The unemployment rate is increasing as job creation slows in WA • The trend unemployment rate in WA was recorded at 6.4% in May 2018 which is the highest it has been since January 2017. • Over the past 12 months, an additional 20,368 jobs were created in WA. • With a 20,368 increase in employment over the year, total employment rose by 1.5% which represented just 6.3% of jobs growth nationally over the year. After slowing for a number of year’s population growth in WA is starting to pick-up • The population of WA increased by 21,395 persons over the 12 months to December 2017 which equated to 5.5% of the national population increase. • Breaking down the increase in population, it was split between: natural increase of 20,004 persons, net overseas migration of 14,209 persons and a decline in population from net interstate migration of 12,818 persons. • Net overseas migration to WA over the past year was the strongest it has been since December 2014 while the loss of residents from net interstate migration was the lowest it’s been since September 2016. Dwelling approvals have fallen substantially over recent years • In May 2018 there were 1,638 dwellings approved for construction in WA which was 28.0% higher over the month by -7.5% lower year-on-year. • Over the month there were 1,206 houses and 432 units approved for construction. • The number of houses approved in May 2018 was 15.3% higher over the month but -11.4% lower year-on-year while unit approvals rose 84.6% over the month and were 5.4% higher year-on-year. The Australian Residential Property Market and Economy Western Australia
  24. 24. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. $0 $500 $1,000 $1,500 $2,000 $2,500 $million Housing finance commitments, WA Owner occupier refinances (3 mth average) Owner occupier non-refinances (3 mth average) Investors (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS The number of dwellings under construction is trending lower • At the end of March 2018 there were 14,409 dwellings under construction throughout WA which was lower than both the previous quarter and the same quarter in 2017. • The 14,409 dwellings under construction consisted of: 7,694 new houses, 6,605 new units and 110 non-new dwellings. • The 7,694 new houses under construction was the fewest since the March 2017 quarter while the 6,605 units under construction was marginally lower than the previous quarter. While housing finance commitments rose in May they are well below peak levels • There was $2.6 billion worth of housing finance commitments in WA in May 2018 which was 17.2% higher over the month but -11.8% lower year-on- year. • The $2.6 billion in housing finance commitments was split between: $499.2 million for owner occupier refinances, $1.4 billion for owner occupier new lending and $646.0 million to investors. • The value of lending to each category rose over the month while over the year each category of lending was lower with owner occupier refinances and investor commitments recording much greater falls. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 No of dwellings under construction, WA Houses Units Source: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy Western Australia
  25. 25. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 4.5% 4.7% 4.9% 5.1% 5.3% 5.5% 5.7% 5.9% 6.1% 6.3% Gross rental yields Hobart Regional Tas -10% -5% 0% 5% 10% 15% Annual change in rents Hobart Regional Tas 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Monthly house and units sales with 3 month average, Tas Houses Units -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Annual change in Tas dwelling values across market segments Low 25% Middle 50% Top 25% -10% 0% 10% 20% 30% 40% 50% Annual change in dwelling values Hobart Regional Tas While most other states have seen value growth slow substantially over the past year, growth remains strong in Tas • Hobart dwelling values increased by 2.3% over the June 2018 quarter while in regional Tas values were 1.7% higher. • Over the 2017-18 financial year, Hobart dwelling values have increased by 12.7% while in regional Tas values were 5.6% higher. • Over the previous financial year, Hobart dwelling values increased by a similar rate (12.8%) while in regional Tas growth is slightly down from the 6.4% a year ago. The most expensive properties in Tas have recorded the greatest value growth over the past year • Across Tas, dwelling values for the most affordable 25% of properties have increased 8.5%, the middle 50% of properties have increased by 8.8% and the most expensive 25% of housing stock has seen values rise 10.6%. • In Hobart, values have increase by 14.8% over the past year for the most affordable properties in the city, they have increased by 13.0% across the middle 50% of the market and the most expensive properties have increased in value 12.2%. • Regional Tas dwelling values have increased 7.2% across the most affordable 25% of properties over the past year, are 6.6% higher across the middle 50% of properties and have risen by 4.1% across the most expensive 25% of properties. Low sales volumes due to low stock for sale is contributing to value growth in Tas • There were 2,774 settled dwelling sales across Tas over the three months to June 2018 which was - 14.4% fewer than the same period in 2017. • The 1,089 settled sales in Hobart over the June 2018 quarter was -16.7% fewer sales than over the same period in 2017. • There were 1,685 settled house and unit sales in regional Tas over the three months to June 2018 which was -12.9% lower than the number over the second quarter of 2017. Rental growth is strong across Tas although it has slowed over the quarter • Hobart rents increased by 1.9% in the June 2018 quarter while rents were 0.8% higher over the same period in regional Tas. • Hobart rents have increased by 10.7% over the past year which is a greater annual increase than the 8.2% a year earlier. • In regional Tas rental rates have increased by 9.6% over the 2017-18 financial year compared to an increase of 2.5% over the 2016-17 financial year. Rental yields are falling in Hobart as values outpace rents, but lifting elsewhere in the state • Gross rental yields in Hobart have fallen over the 12 months to June 2018 to 4.94% from 5.14%. • Outside of Hobart, rental yields have firmed over the year from 5.69% to 5.74%. The Australian Residential Property Market and Economy Tasmania
  26. 26. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 0 50 100 150 200 250 300 350 400 Houses and units approved for construction, Tas Houses (3 mth average) Units (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS -5,000 -4,000 -3,000 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 Components of annual population growth, Tas Natural increase Net overseas migration Net interstate migration Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Tas annual change in employment (trend) Source: CoreLogic, ABS 0% 2% 4% 6% 8% 10% 12% 14% Tas unemployment rate (trend) Source: CoreLogic, ABSSource: CoreLogic, ABS -10% -5% 0% 5% 10% 15% 20% Quarterly and annual change in state final demand - Tas Quarterly change Annual change Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS State final demand for Tas has been steady over the past year • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • State final demand in Tas increased by 2.0% over the March 2018 quarter, its strongest growth in a year. • State final demand increased by 3.9% over the past year which was an equivalent rate of increase to 12 months earlier. While it has been strong, Tas jobs growth has slowed substantially over the past year • The trend unemployment rate in Tas was recorded at 6.3% in May 2018 which is the highest it has been since October 2016. • Over the past 12 months, an additional 2,893 jobs were created in Tas. • With a 2,893 person increase in employment over the year, total employment rose by 0.5%, its slowest growth since November 2016 and representing 0.9% of jobs growth nationally over the year. Population growth has accelerated over the past year in Tas • Over the year to December 2017, the population of Tas increased by 4,875 persons which equated to 1.3% of the nation’s population growth. • Breaking down the increase in population, it was split between: natural increase of 831 persons, net overseas migration of 2,161 persons and net interstate migration of 1,883 persons. • Net overseas migration to Tas over the past year was slightly down on the previous year (2,277 persons) while net interstate migration was the strongest it has been since June 2004. A housing supply response is slowly starting to occur across Tas • Across Tas there were 285 dwellings approved for construction in May 2018 which was the second- highest number of monthly approvals over the past three years. • The 285 approvals were split between 257 houses and 28 units. • The number of houses approved in May 2018 was 34.6% higher over the month and 20.1% higher year-on-year while unit approvals fell -6.7% over the month and were -48.1% lower year-on-year. The Australian Residential Property Market and Economy Tasmania
  27. 27. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. The number of dwellings under construction is trending higher • At the end of March 2018 there were 1,973 dwellings under construction throughout Tas which was the greatest number under construction since September 2015. • The 1,973 dwellings under construction consisted of: 1,503 new houses, 447 new units and 22 non- new dwellings. • The 1,503 new houses under construction was the greatest since the September 2015 quarter while the 447 units under construction was marginally lower than the previous quarter. The value of housing finance commitments continues to trend higher • There was $382.3 million worth of housing finance commitments in Tas in May 2018 which was 12.8% higher over the month and 7.4% higher year-on- year. • The $328.3 million in housing finance commitments was split between: $75.2 million for owner occupier refinances, $225.5 million for owner occupier new lending and $81.6 million to investors. • The value of lending to each category rose over the month while over the year each category of lending rose except investor lending. $0 $50 $100 $150 $200 $250 $million Housing finance commitments, Tas Owner occupier refinances (3 mth average) Owner occupier non-refinances (3 mth average) Investors (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS 0 500 1,000 1,500 2,000 2,500 No of dwellings under construction, Tas Houses Units Source: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy Tasmania
  28. 28. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% Gross rental yields Darwin Regional NT -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% Annual change in rents Darwin Regional NT Housing market remains weak in NT however, there is quite a divergence between Darwin and the rest of the state • Over the June 2018 quarter, dwelling values in Darwin fell by -0.8% while in regional NT they increased by 4.0%. • Darwin dwelling values fell by -7.7% over the 12 months to June 2018 while over the previous 12 months values had fallen by a lower -2.6%. • Over the past year, dwelling values in regional NT increased by 4.8% which is a significant improvement on the -7.0% fall in values the previous year. Value falls are greatest across the most expensive housing stock • Throughout NT the most affordable 25% of properties have recorded a -3.8% fall in values over the past year compared to a -4.2% fall across the middle 50% of suburbs and a -6.2% fall across the most expensive 25% of suburbs. • In Darwin, the past year has seen values fall -8.4% across the most affordable 25% of properties, a decline of -6.0% across the middle 50% of properties and a fall of -7.2% across the most expensive 25% of properties. • Regional NT dwelling values have increased 5.4% across the most affordable 25% of properties over the past year, are 7.2% higher across the middle 50% of properties and have risen by 3.3% across the most expensive 25% of properties. Settled sales volumes have increased marginally over the past year • Throughout the June 2018 quarter there were 710 settled dwelling sales across NT which was 4.6% more sales than over the same quarter in 2017. • In Darwin there were 571 settled sales over the quarter which was 8.3% more sales than over the June 2017 quarter. • While settled sales rose in Darwin, the 139 sales in regional NT over the quarter was -8.6% fewer than the same period a year earlier. Rental growth is accelerating in regional NT as the declines in Darwin slow • Darwin rents fell by -1.0% in the June 2018 quarter while rents were 0.5% higher over the same period in regional NT. • Darwin rents have fallen by -1.7% over the past 12 months with the rate of rental decline slowing from an annual decline of -4.2% a year earlier. • Over the past 12 months rents in regional NT have increased by 3.0% which is slightly higher than the 2.7% annual increase a year ago. Rental yields are rising in Darwin and are slightly lower in regional NT • Darwin’s gross rental yields have increased to 5.74% in June 2018 from 5.44% a year earlier. • In regional NT gross rental yields currently sit at 6.93% compared to 6.98% a year earlier. 0 50 100 150 200 250 300 350 400 450 500 Monthly house and units sales with 3 month average, NT Houses Units -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Annual change in NT dwelling values across market segments Low 25% Middle 50% Top 25% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% Annual change in dwelling values Darwin Regional NT The Australian Residential Property Market and Economy Northern Territory
  29. 29. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. 0 50 100 150 200 250 300 350 400 450 Houses and units approved for construction, NT Houses (3 mth average) Units (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS -4,000 -3,000 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 Components of annual population growth, NT Natural increase Net overseas migration Net interstate migration Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% NT annual change in employment (trend) Source: CoreLogic, ABS 0% 2% 4% 6% 8% 10% 12% NT unemployment rate (trend) Source: CoreLogic, ABSSource: CoreLogic, ABS -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Quarterly and annual change in state final demand - NT Quarterly change Annual change Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS NT state final demand has fallen over the past year • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • State final demand in NT fell by -2.0% over the March 2018 quarter, although the rate of decline slowed over the quarter. • State final demand fell by -7.9% over the past year which was its largest annual fall since December 2015. The unemployment rate in NT is one of the countries lowest and it is trending lower • NT’s trend unemployment rate was recorded at 4.0% in May 2018 which was up from 3.3% a year ago however it is once again starting to fall. • Over the past 12 months, an additional 685 jobs were created in NT. • With a 685 person increase in employment over the year, total employment rose by 0.5%, its strongest growth since June 2017 and representing 0.2% of jobs growth nationally over the year. NT’s population is barely growing • The population of NT increased by 572 persons over the 2017 calendar which equated to 0.1% of national population growth and was NT’s smallest annual increase in population since March 2015. • Breaking down the increase in population, it was split between: natural increase of 2,775 persons, net overseas migration of 1,060 persons and a loss from net interstate migration of 3,263 persons. • Net overseas migration to NT over the past year was the smallest it has been since June 2016 while the loss of residents from net interstate migration was the greatest on record. Dwelling approvals are climbing off a very low base • 69 dwellings were approved for construction in NT in May 2018 which was 46.8% over the month and 16.9% higher year-on-year. • Of the 69 approvals, 66 were for houses which was 65.0% higher over the month and 15.8% higher year-on-year. • Few units are being approved for construction with just 3 in May 2018 which was -57.1% lower than the previous month but actually 50% higher than a year previous. The Australian Residential Property Market and Economy Northern Territory
  30. 30. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. The number of dwellings under construction is trending lower • There were 967 dwellings under construction across the NT at the end of March 2018 which was marginally higher than the 952 under construction at the end of the previous quarter • The 967 dwelling under construction consisted of: 252 new houses, 709 new units and 26 non-new dwellings. • The 252 new houses under construction was slightly higher than the previous quarter but lower than a year ago while the 709 new units was greater than both the previous quarter and year. There has been a slight rebound in mortgage demand • In May 2018 there was $138.8 million worth of housing finance commitments which was 24.5% higher over the month and 2.8% higher year-on- year. • The $138.8 million in housing finance commitments was split between: $22.9 million for owner occupier refinances, $72.6 million for owner occupier new lending and $43.3 million to investors. • The value of lending to each category rose over the month while over the year each category of lending rose except investor lending. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 No of dwellings under construction, NT Houses Units Source: CoreLogic, ABSSource: CoreLogic, ABS $0 $20 $40 $60 $80 $100 $120 $140 $160 $million Housing finance commitments, NT Owner occupier refinances (3 mth average) Owner occupier non-refinances (3 mth average) Investors (3 mth average) Source: CoreLogic, ABSSource: CoreLogic, ABS The Australian Residential Property Market and Economy Northern Territory
  31. 31. © Copyright 2018 | RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. No reproduction, distribution, or transmission of the copyrighted materials is permitted. The information is deemed reliable but not guaranteed. -5% 0% 5% 10% 15% Quarterly and annual change in state final demand - ACT Quarterly change Annual change Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS Dwelling value growth has slowed over the past year in Canberra • Over the second quarter of 2018 Canberra dwelling values increased by 0.2% • Over the 2017-18 financial year, Canberra dwelling values increased by 2.3% compared to a 7.8% increase over the previous year. The most affordable properties have recorded the slowest annual value growth • Over the past 12 months, the most affordable 25% of Canberra properties have increased by 1.6% compared to a 2.6% increase across the middle 50% of properties and a 2.2% rise in the most expensive 25% of properties. Settled sales volumes stable over the past year • Canberra recorded 2,223 dwelling settlements over the June 2018 quarter which was one more sale than over the same period in 2017. Although rental growth in Canberra is slower than a year ago it remains quite strong • Over the June 2018 quarter, Canberra rents increased by 1.3% which was slightly greater than the 1.0% increase over the same quarter in 2017. • Over the past 12 months Canberra rents have increased by 4.5% which is lower than the 7.1% annual increase a year earlier. Rents are rising faster than values pushing yields higher • As at June 2018, gross rental yields in Canberra were recorded at 4.64% compared to 4.52% a year earlier. • The 4.64% gross rental yield is the highest yields have been since September 2014. State final demand is down over the quarter with the annual change slowing • State final demand measures the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets. It excludes sales made to buyers who use them as inputs to a production activity, export sales and sales that lead to accumulation of inventories. Given it excludes exports and inventories it isn’t directly comparable to GDP. • In the ACT, state final demand fell by -0.8% over the March 2018 quarter which was the largest quarterly fall since September 2015. • In March 2018, state final demand was 1.6% higher than a year earlier which was the slowest year-on- year growth since June 2016. 4.2% 4.4% 4.6% 4.8% 5.0% 5.2% Gross rental yields, Canberra -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Annual change in Canberra rents 0 100 200 300 400 500 600 700 800 900 1,000 Monthly house and units sales with 3 month average, ACT Houses Units -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Annual change in ACT dwelling values across market segments Low 25% Middle 50% Top 25% -15% -10% -5% 0% 5% 10% 15% 20% 25% Annual change in Canberra dwelling values The Australian Residential Property Market and Economy Australian Capital Territory

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