Property Update - July 2022

Monthly highlights

• The combined value of residential real estate in Australia dipped to $9.95 trillion at the end of June, down from $9.97 trillion in the previous month.
  
  
• Dwelling values in Australia are 11.2% higher over the past 12 months, down from a cyclical peak of 22.4% recorded in the 12 months to January 2022.
  
  
• Adelaide outpaced Brisbane to record the highest annual growth in dwelling values amongst the regional and capital city dwelling markets, at 25.7% and 25.6% respectively. The lowest rate of appreciation in values was across Melbourne, which saw a 3.1% rise over the year.
  
  
• Diverse selling conditions are emerging across the capitals, but each city has moved through a peak rate of growth.
  
  
• Sales volumes are starting to ease from recent highs. CoreLogic estimates that in the 12 months to June, there were 584,917 sales nationally, up 3.2% compared to the previous year. While up annually, initial sales estimates over the June quarter were -15.9% lower than the same quarter of the previous year.
  
  
• At the national level, properties are taking longer to sell. In the three months to June, the median days on market was 30, up from a recent low of 20 days over the three months to November.
  
  
• Similarly, vendor discounting has also increased from the recent low of -2.8% recorded in the three months to April last year. In the three months to June, the median vendor discount at the national level was -3.5%.
  
  
• In the four weeks to July 4, there were 37,708 newly advertised dwellings listed for sale nationally. While the volume of new listings has steadied, the flow of new listings is now 7.5% higher than the five-year average for the equivalent period.  
  
  
• At the national level, total listings are gradually rising, but remain well below the average for this time of the year. Total stock levels remain -26.2% below the five-year average.
  
  
• The combined capital cities clearance rate continued to trend lower through June, averaging 55.6% in the five weeks to July 3rd. This is down from 73.1% in the equivalent period of 2021.
  
  
• Unlike changes in dwelling purchase values, rental value growth remains high across Australian dwellings. Rent values increased a further 0.9% in June, taking rents 9.5% higher over the year.
  
  
• Through June, Australian gross rent yields rose to 3.33%, up from a recent low of 3.21% in January this year. Since the end of 2021, gross rent yields in Sydney have lifted 23 basis points, and 18 basis points in Melbourne.
  
  
• Through May, 16,390 dwelling were approved, up 9.9% from the month prior. The increase was largely driven by a 35.1% increase in unit approvals, while house approvals fell 2.4%. Despite this, unit approvals remain below the decade average (7,457), while house approvals remain above the decade average of 9,773.
  
  
• Lending for property purchases rose 1.7% over the month of May. This was largely led by a 2.1% increase (or $455 million) in owner occupier lending, while investor lending was up 0.9% ($99 million).
  
  
• The RBA lifted the cash rate a further 50 basis points in July, taking the cumulative hike since May to 125 basis points. Global inflation remains high, boosted by supply chain disruptions, war in Ukraine and strong demand.  The RBA expects it will be ‘some time yet’ before inflation returns to target in most countries.
  
  
• Average long-term fixed rates have now increased to 4.5% for the investor segment, and 4.1% for new owner-occupiers. Through May, average variable rates trended higher in response to the higher cash rate.
   

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