Market downturn kicks off 2018

In the month leading up to 7 January, mortgage market activity plunged by 31.5 per cent nationwide.

NSW experienced the greatest decline, as mortgage market activity fell by -36.5 per cent in the same period, followed by Queensland (-33.3 per cent), Tasmania (-32.1 per cent), Victoria (-28.4 per cent), Western Australia (-27.6 per cent) and South Australia (-26.4 per cent).

The figures underpin a negative mortgage market month-on-month trend of -0.1 per cent nationally.

Further, home values in Sydney and Perth dropped by -0.1 per cent, while Melbourne’s and Adelaide’s home values remained stable, with Brisbane the only capital city to experience an upturn, with a slight increase of 0.1 per cent.

Property sales were most prevalent in Melbourne in the first week of 2018, with 2,685 houses and 1,155 units sold in the Victorian capital.

In the same week, 1,593 houses and 886 units were sold in Sydney, followed by Brisbane (1,182 houses and 247 units), Perth (892 houses and 233 units), Adelaide (630 houses and 108 units), Canberra (172 houses and 80 units), Hobart (137 houses and 42 units) and Darwin (27 houses and 9 units).

In first week of January, 8,100 homes were newly listed nationwide, most of which were listed in Melbourne (1,982), closely trailed by Brisbane (1,861), Perth (1,665) and Sydney (1,474).

Buyers were quickest to snap up property in Melbourne and Canberra, with houses, on average, spending 29 days on the market.

Conversely, buyers were slowest to purchase property in Perth, with houses, on average, spending 68 days on the market.

Speaking before Christmas, CoreLogic’s chief of research, Tim Lawless, predicted that housing market conditions will continue to slow in response to regulatory changes.

“In 2018, the housing market performance is likely to be significantly different relative to previous years,” the head researcher said.

“We’re likely to see lower to negative growth rates across previously strong markets, more cautious buyers and ongoing regulator vigilance of credit standards and investor activity.”

The research chief drew on trends following housing market downturns in previous years, and he noted that current market conditions are pointing to a similar outcome.

“Previous downturns have seen the annual number of sales fall by around 20–25 per cent from peak to trough. Considering the cyclical peak in transactional activity occurred over the 12 months ending August 2015, year-on-year transactional activity is already 13.2 per cent lower than the most recent peak,” Mr Lawless said.

[Related: Negative housing growth expected in 2018]