For the six months, January to June 2018, the number of sale transfers in NSW declined by 17% compared to the previous year’s equivalent period.
At the end of 2017, the expectation for 2018 was lower property prices, especially in Sydney, after extraordinary gains over the previous few years.
It was hoped that lower property prices might stimulate sale activity. Higher prices made property acquisitions impossible for an ever increasing proportion of the population.
As it turned out, that was overly optimistic and instead the market behaved exactly as it always did.
continues after ad
Lower property prices is consistently associated with lower sales volumes. Although home dwelling values in NSW were down by only 4.2%* over the financial year to June 2018, transfers were down by 17% for the most recent six months to June 2018.
However, it is not as bad as it might seem. Although January to June 2018 was down by 17% compared to the previous year, it was down by only 6% compared to two years ago.
On a financial year basis, 2017/18 had 4% fewer transfers than 2016/17.
At the end of June 2018, there were 20.4%* more dwellings listed for sale in Sydney compared to 12 months ago. This means that prices will likely be flat or lower over the coming months.
If you are doing revenue budgeting for a conveyancing practice, for the next 12 months it is probably appropriate not to factor in any automatic increase. Maintaining transaction numbers at the 2017/18 level will probably turn out to be an excellent result.
*Price and listing data from CoreLogic.
© 2018 Legal Practice Intelligence