NSW and Victoria Property Sales Volumes Dip from Peak
Posted at Legal Practice Intelligence - 8 July 2016
The NSW and Victoria conveyancing industry experienced three glorious years of increasing property sales activity between 2013 and 2015.
At the end of the three years, the volume of property sales in NSW was 25% higher. In Victoria it was 36% higher.
This prompted considerations of whether the good times will come to an end, and if they do, how bad could it get? Available data for 2016 is now giving us answers.
For the first five months of 2016, the volume of property transfers in NSW was 9.5% lower compared to the equivalent months of 2015.
For the first four months of 2016, the volume of property transfers in Victoria was 5% higher than it was for the equivalent months of 2015. The increase in Victoria is not indicative of the trend of the most recent two months of available data.
March and April 2016 combined was down by 0.88% compared to the previous year. January and February was still "booming", coinciding with increases in property prices.
The volume of property transactions could not keep growing indefinitely at 8-9% per annum. How bad is a 9.5% back-track such as occurred in NSW? It is the equivalent of losing one year of growth out of the last three years.
According to the latest CoreLogic RP Data analysis, property prices increased in June 2016 by 1.2% in Sydney and 0.8% in Melbourne. This will alleviate any further immediate downward pressures in property sales volumes. Furthermore, there is no current expectation of an increase in interest rates in the near term.
Victoria might still experience a reduction in property sales volumes over the coming months but if it follows the NSW experience of -9.5%, this is a manageable and not-unexpected market correction.
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