Market UpdatesGenerally as we move through May, Australia’s property market typically slows down, however that wasn’t the case this year. According to CoreLogic, 2,619 properties went under the hammer on the weekend of May 20, that’s 210 more than the previous week and well above the 1,920 in the same week a year ago.
Auction activity across the two major markets of Melbourne and Sydney increased, with 1,222 Melbourne homes going to auction, up from 1,098 the previous week, and 1,003 Sydney homes going under the hammer, up from the previous week’s 960. It should be noted though, that even in Sydney, auctions only constitute fewer than half of all property sales over recent years and in the regions, substantially less than that.
Across the smaller markets, CoreLogic reported that volumes also increased across capital cities, with the exception of Canberra where volumes remained relatively steady. All in all, this spells good news for buyers, especially in many Sydney and Melbourne markets where a shortage of stock has caused plenty of pent up demand, increasing competition for homes.
In fact, according to a new report from the Australian Housing and Urban Research Institute, housing supply in some cities has not been keeping up with demand. The report, the first of its kind in Australia, examined data from between 2006 and 2014 and found that all capital cities are failing to provide enough affordable options to manage the country's housing crisis.
Head researcher Rachel Ong from Curtin University said it examined how the distribution of housing across different locations, in particular local government areas, responded to changes in population and changes in employment rates and opportunities. "The policy narrative that we usually get is that there is a lack of housing supply relative to demand for housing, but what we found in the report was that that is actually not the primary issue," Professor Ong said.
"The issue is not so much about the population growing at a really quick rate, there are also some supply-side barriers and even geographical constraints as well that are preventing quick expansion of supply," she said. Professor Ong said it was especially severe considering Sydney's population growth actually sat under the national average. "In Sydney it also has a lot to do with high house prices, with really, really high house price to income ratio."