Property Update - December 2022

Monthly highlights

• The combined value of residential real estate in Australia fell to $9.4 trillion at the end of October, down from $9.5 trillion in the previous month.
  
  
• Dwelling values in Australia are -3.2% lower over the past 12 months, marking the largest annual decline in national home values since September 2019.
  
  
• November marked the 7^th consecutive month of decline in the national home value index. However, the monthly  pace of decline has been slowing since September.
  
  
• The highest annual growth rate in dwelling values among the regional and capital city dwelling markets was across Regional SA, at 18.9%. The lowest rate of change in values was across Sydney, down -10.6% over the year.
  
  
• Sales volumes are trending lower as buyer demand slows. CoreLogic estimates that in the 12 months to November, there were 535,356  sales nationally, down -13.3% compared to the previous year. 
  Sales estimates are still 10.8% above the decade average annual sales volume.
  
  
• At the national level, properties are taking longer to sell. In the three months to November, the median days on market was 35, up from a low of 20 days in the same period of 2021.
  
  
• Similarly, vendor discounting has also expanded from -2.9% in the three months to November last year. In the three months to November 2022, the median vendor discount at the national level was -4.3%.
  
  
• At the national level, total listings were fairly steady through to the start of December. Advertised stock levels remain low compared to previous years, in part due to the subdued flow of new listings.
  
  
• The combined capital cities clearance rate shifted slightly lower over the four weeks to December 4th, averaging 58.0%. This is down from an average of 59.5% in the previous four week period.
  
  
• Annual growth in rent values has re-accelerated. Annual growth in Australian rent values was 10.2% in the 12 months to November, a record high. This has partially been driven by growth in unit rents across Sydney, Melbourne and Brisbane, where rents have increased around 14-15% annually.
  
  
• Through October, Australian gross rent yields rose to 3.71%, up from a recent low of 3.21% in January this year. Since the end of 2021, gross rent yields in Sydney have lifted 66 basis points, and 46 basis points in Melbourne.
  
  
• Mortgage originations for ‘riskier’ types of lending trended notably lower through the September quarter of 2022. The portion of loans originated with a debt-to-income ratio of six or more fell to 17.1% (down from 23.3% in the September 2021 quarter), and loan to income ratios of six or more dropped to 7.1% in the quarter. 
   

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