housing market trends...2020/05/21 · quarterly growth rates suggest that some housing markets had...
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Housing market trendsOur Insights. Your Story.
May 2020
Quarterly growth rates suggest that some housing markets had softer growth rates well before COVID-19.
However, it is clear that COVID-19 has placed Australian housing markets at the cusp of another downturn.
318 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
The quarterly trend in value growth shows the market moved through ‘peak’ growth late last year
Source: CoreLogic
Quarterly change in dwelling values
© 2020 CoreLogic, Inc. All Rights Reserved.
-6%
-4%
-2%
0%
2%
4%
6%
8%
Apr 15 Apr 16 Apr 17 Apr 18 Apr 19 Apr 20
Sydney Melbourne Brisbane Adelaide Perth
-6%
-4%
-2%
0%
2%
4%
6%
8%
Apr 15 Apr 16 Apr 17 Apr 18 Apr 19 Apr 20
Hobart Darwin Canberra
Previous economic shocks have seen housing values relatively insulated, while volumes are more susceptible to volatility.
518 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Housing values have generally been insulated from financial shocks historically but have been more reactive to credit tightening events
Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
Housing indices across previous shocks (5yrs either side of event)
Housing sales volume across previous shocks (5yrs either side of event)
40
60
80
100
120
140
160
Oct 82 Oct 87 Oct 92
Black Monday stock market crash (Oct 87)
40
60
80
100
120
140
160
180
Dec 92 Dec 97 Dec 02
Asian financial crisis(Dec 97)
40
60
80
100
120
140
160
Sep 96 Sep 01 Sep 06
Tech wreck / Sep 11
40
50
60
70
80
90
100
110
120
Jan 03 Jan 08 Jan 13
GFC(Jan 08)
60
70
80
90
100
110
120
130
Dec 09 Dec 14 Dec 19
Macroprudential, (Dec 14 / Mar 17)
50000
100000
150000
200000
250000
Oct 82 Oct 87 Oct 92
Black Monday stock market crash (Oct 87)
250,000
300,000
350,000
400,000
450,000
Sep 96 Sep 01 Sep 06
Tech wreck / Sep 11(Sep 01)
140,000
150,000
160,000
170,000
180,000
190,000
200,000
Jan 03 Jan 08 Jan 13
GFC(Jan 08)
200,000
250,000
300,000
350,000
400,000
Dec 09 Dec 14 Dec 19
Macroprudential(Dec 14 / Mar 17)
Housing values and volumes are based on combined capitals region
200,000
250,000
300,000
350,000
400,000
450,000
Dec 92 Dec 97 Dec 02
Asian financial crisis(Dec 97)
618 July 2019© CoreLogic, Inc. All Rights Reserved.
The same is true of the COVID-19 downturn.
The combined capital cities market has seen less than half a percent in value declines over the past month.
Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
Rolling 28-day growth rate in combined capital city dwelling market
-0.3%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
27/0
1/20
20
3/02
/202
0
10/0
2/20
20
17/0
2/20
20
24/0
2/20
20
2/03
/202
0
9/03
/202
0
16/0
3/20
20
23/0
3/20
20
30/0
3/20
20
6/04
/202
0
13/0
4/20
20
20/0
4/20
20
27/0
4/20
20
4/05
/202
0
11/0
5/20
20
18/0
5/20
20
718 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Melbourne and Sydney have shown the sharpest slowdown in housing values, however the level of decline remains mild to date.
Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
Daily CoreLogic home value index – rolling 28-day change
-0.04%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
27/0
1/2
020
24/0
2/2
020
23/0
3/2
020
20/0
4/2
020
18/0
5/2
020
Sydney
-0.76%-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
27/0
1/2
020
24/0
2/2
020
23/0
3/2
020
20/0
4/2
020
18/0
5/2
020
Melbourne
-0.19%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
27
/01
/20
20
24
/02
/20
20
23
/03
/20
20
20
/04
/20
20
18
/05
/20
20
Combined capitals
0.06%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
27/0
1/2
020
24/0
2/2
020
23/0
3/2
020
20/0
4/2
020
18/0
5/2
020
Brisbane
0.41%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
27/0
1/2
020
24/0
2/2
020
23/0
3/2
020
20/0
4/2
020
18/0
5/2
020
Adelaide
0.01%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
27/0
1/2
020
24/0
2/2
020
23/0
3/2
020
20/0
4/2
020
18/0
5/2
020
Perth
818 July 2019© CoreLogic, Inc. All Rights Reserved.
National home sales fell by around 42% in April compared with March… the lowest monthly reading since 1990
Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Apr 00 Apr 05 Apr 10 Apr 15 Apr 20
Monthly sales with six month moving average, National
918 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved. Source: CoreLogic, Westpac/Melbourne Institute© 2020 CoreLogic, Inc. All Rights Reserved.
Note: recent months of sales volumes are modelled estimates, and are subject to revision
Sales volumes are declining significantly as consumer confidence reaches its lowest levels since the early 90’s recession, however sentiment has shown a bounce back in May
0
10,000
20,000
30,000
40,000
50,000
60,000
0
20
40
60
80
100
120
140
May 90 May 95 May 00 May 05 May 10 May 15 May 20
Vo
lum
e o
f d
wel
ling
sale
s
Co
nsu
mer
sen
tim
ent
ind
ex
Consumer sentiment v Volume of dwellings sales
Volume of sales (RHS)Consumer sentiment index (LHS)
1018 July 2019© CoreLogic, Inc. All Rights Reserved.
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Rolling seven day count of CMA reports, Australia2019 v 2020
Seven day count 2020 Seven day count 2019
Real estate agents have seen a significant drop in activity, although activity has bounced back post Easter and continues to trend higher
Source: CoreLogic
Trending higher, but down 24% on same time last year as at May 17th
Pre-Easter: Down 60% on same time last year
1118 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
159,413
0
50,000
100,000
150,000
200,000
250,000
300,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2016 2017 2018 2019 2020
23,541
0
10,000
20,000
30,000
40,000
50,000
60,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2016 2017 2018 2019 2020
New listing numbers have fallen sharply and could fall further over the coming months
New Listings, rolling 28-day count, national
Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
28 days ending May 17-33% compared with last year
Total Listings, rolling 28-day count, national
28 days ending May 17-25.5% compared with last year
1218 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Mortgage related valuations activity has also levelled out, with refi activity helping to offset lower purchasing related valuations
Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
22-Mar-20
17 Mar 19 17 May 19 17 Jul 19 17 Sep 19 17 Nov 19 17 Jan 20 17 Mar 20 17 May 20
Number of valuations events, Australia (rolling seven day count)
Easter 2019
Christmas / New Year period
Australia Day longweekend
Valuation numbers were tracking 25% below the March 22 peak and
are level with the same time last year
Rental markets are likely to see larger declines than housing values due to higher supply at a time of lower demand.
1418 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved. Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
Annual change in rents
Rents have generally shown a softer trajectory than housing values, with early signs of weakness through April
Gross rental yields
2.9%3.2%
4.4%
4.4%
4.3%
3%
3%
4%
4%
5%
5%
6%
Apr 10 Apr 12 Apr 14 Apr 16 Apr 18 Apr 20
Sydney Melbourne BrisbaneAdelaide Perth
-0.7%0.7%0.9%
2.3%1.6%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Apr 10 Apr 12 Apr 14 Apr 16 Apr 18 Apr 20
Sydney Melbourne BrisbaneAdelaide Perth
1518 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved. Source: CoreLogic© 2020 CoreLogic, Inc. All Rights Reserved.
Month on month change in rents
7 of the 8 capital cities recorded a fall in rents through April… the first sign of a broad based weakening in rental market conditions
-0.7%
-0.5%-0.4%
-0.1%
0.1%
-1.1%
-0.1%
-0.7%
0.0%
0.1%
-0.2%
0.4%
0.0%
-0.4%-0.5%-0.5%
0.0%
-0.4%
Syd
ne
y
Mel
bo
urn
e
Bri
sban
e
Ad
elai
de
Per
th
Ho
bar
t
Dar
win
Can
ber
ra
Reg
iona
l NSW
Reg
iona
l Vic
Reg
iona
l Qld
Reg
iona
l SA
Reg
iona
l WA
Reg
iona
l Tas
Reg
iona
l NT
Co
mb
ined
cap
ital
s
Co
mb
ined
reg
ion
als
Nat
ion
al
1618 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Across all industries, payroll jobs have declined 7.3%, but the effect is more acute in some parts of the economy
Source: ABS© 2020 CoreLogic, Inc. All Rights Reserved.
-27.1%
-19.0%
-12.8%
-11.1%
-10.3%
-9.2%
-9.2%
-8.7%
-7.4%
-7.0%
-6.7%
-6.5%
-6.0%
-6.0%
-1.8%
-1.7%
-1.6%
-1.0%
Accommodation and Food Services
Arts and Recreation Services
Rental, Hiring and Real Estate Services
Professional, Scientific and Technical Services
Other Services
Administrative and Support Services
Information Media and Telecommunications
Wholesale Trade
Agriculture, Forestry and Fishing
Manufacturing
Transport, Postal and Warehousing
Construction
Retail Trade
Mining
Education and Training
Public Administration and Safety
Electricity, Gas, Water and Waste Services
Health Care and Social Assistance
Financial and Insurance Services
Change in payroll jobs between March 14th and 2nd May
1718 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Employment fundamentals will be an important determinant of the extent that housing demand is impacted
Portion of workforce employed in most impacted sectors
Source: ABS. Note the industries used to calculate 'most impacted sectors’ are accommodation and food services and arts and recreation services
12.7%
10.8%
9.7%9.2%
8.7% 8.6% 8.4%7.9%
Hobart Brisbane Darwin Sydney Adelaide Perth Melbourne ACT
By Capital City
1818 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Regions with high concentrations of vulnerable workforces generally have a higher incidence of renting households
Sydney - Inner West
Sunshine Coast
Gold Coast
Brisbane Inner City
Hobart
Melbourne - Inner
Sydney - City and Inner South
Darwin
Sydney - Eastern Suburbs
Perth - Inner
Sydney - Parramatta
Western Australia - Wheat Belt
Queensland - Outback
Toowoomba
0%
10%
20%
30%
40%
50%
60%
70%
80%
0% 2% 4% 6% 8% 10% 12% 14% 16%
Esti
mat
ed p
ort
ion
of
dw
ellin
gs t
hat
are
ren
tals
Portion of workforce employed in accommodation and food services, and arts and recreation services
Concentration of workforce in industries highly impacted by COVID-19, and portion of renting households - SA4 Regions, Australia
Source: ABS catalogue 6291. Note employment data of the portion of the workforce in arts and tourism is derived from the four quarter average to February 2020
Source: CoreLogic, ABS© 2020 CoreLogic, Inc. All Rights Reserved.
1918 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
And this coincides with areas of significant rental stock increases
36.2%
34.1%
22.8%
13.4%
13.0%
12.5%
10.4%
10.0%
8.7%
8.6%
7.2%
7.2%
6.9%
6.2%
4.9%
4.7%
4.0%
3.1%
3.1%
2.7%
2.7%
2.6%
2.5%
1.0%
0.2%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Melbourne - Inner
Sydney - City and Inner South
Sydney - Eastern Suburbs
Adelaide - Central and Hills
Warrnambool and South West
Gold Coast
Sydney - Sutherland
Melbourne - Inner South
Sydney - Inner West
Richmond - Tweed
Melbourne - Inner East
Newcastle and Lake Macquarie
Sydney - North Sydney and Hornsby
Geelong
Murray
Perth - Inner
Australian Capital Territory
Hobart
Barossa - Yorke - Mid North
Brisbane Inner City
Hunter Valley exc Newcastle
West and North West
Sydney - Ryde
Melbourne - North East
Sunshine Coast
Change in total rental listings by SA4 region - 22nd of March to 26th April
The next few months present an unprecedented shock to an economy with otherwise strong fundamentals.
The institutional response is about ‘building a bridge’ to the recovery phase, with stimulus totaling about 16.5% of GDP
2118 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Source: CoreLogic, ABS
© 2020 CoreLogic, Inc. All Rights Reserved.
-594,300
-700
-600
-500
-400
-300
-200
-100
0
100
200
Apr 00 Apr 05 Apr 10 Apr 15 Apr 20
Monthly change in jobs, Australia (,000)
The Australian labour market fell off a cliff in April, with the most severe declines recorded across part time jobs
-2.5%
-9.0%
Full time v Part time %
-221
-374
Full time v Part time ,000
2218 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Source: CoreLogic, ABS
© 2020 CoreLogic, Inc. All Rights Reserved.
63.5%
57%
58%
59%
60%
61%
62%
63%
64%
65%
66%
67%
Apr 00 Apr 05 Apr 10 Apr 15 Apr 20
Participation rate, Australia
6.2%
13.70%
3%
5%
7%
9%
11%
13%
15%
Apr 00 Apr 05 Apr 10 Apr 15 Apr 20
Unemployment rate v Under-employment rate, Australia
underemployment
unemployment
The Australian labour market fell off a cliff in April, with the most severe declines recorded across part time jobs
2318 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
For those currently working, the loss of jobs and wages seemed to be stabilizing at the start of May
Index set at 100 in the week where Australia
reported its 100th case of Coronavirus
84.0
86.0
88.0
90.0
92.0
94.0
96.0
98.0
100.0
102.0
Index of job and wage levels across Australia
Wages Index Jobs Index
Source: CoreLogic, ABS.
2418 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
Housing demand will be materially impacted by a stalling in overseas migration
Source: CoreLogic, ABS.
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20
Annual change in number of overseas arrivals
77,36973,919
18,78913,970 12,900
3,110 1,726 542
Net overseas migration by capital city 2018/19
2518 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
A freeze in international migration will greatly impact dwelling markets across NSW and VIC
Number of overseas migrants – four quarters to September 2019
82,113 81,665
31,370
17,071 14,175
2,725 2,535 389
VIC NSW QLD WA SA ACT TAS NT
Source: CoreLogic, ABS.
2618 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
While net-interstate migration may be a bright spot for Queensland dwelling markets
Interstate migrants by state of departure – 2 years to September 2019
Source: CoreLogic, ABS.
-
50,000
100,000
150,000
200,000
250,000
QLD NSW VIC WA SA ACT TAS NT
State of Arrival
ACT NSW NT QLD SA TAS VIC WA
2718 July 2019© CoreLogic, Inc. All Rights Reserved.© 2020 CoreLogic, Inc. All Rights Reserved.
A longer term risk to housing values is a rise in distressed property sales associated with higher unemployment and rising mortgage arrears
Source: RBA
RBA Financial Stability Review, April 2020
2818 July 2019© CoreLogic, Inc. All Rights Reserved.
Historically, housing values have been largely insulated from economic shocks, but
market activity has seen severe declines
The same phenomenon has played out over April. Property prices were steady, but
transaction volumes declined and estimated 40%
There are signs that transaction activity has reached a new normal, and is starting to
stabilize
One area of the housing market to watch is the rental market. Because of COVID-19,
rental demand is falling, which already had a severe impact on prices over April.
Downside risks for the housing market still include an increase in arrears rates,
making employment a key indicator to follow.
Key takeaways
2918 July 2019© CoreLogic, Inc. All Rights Reserved.
Disclaimer
In compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.
Queensland DataBased on or contains data provided by the State of Queensland (Department of Natural Resources and Mines) 2020. In consideration of the State permitting use of this data you acknowledge and agree that the State gives no warranty in relat ionto the data (including accuracy, reliability, completeness, currency or suitability) and accepts no liability (including without limitation, liability in negligence) for any loss, damage or costs (including consequential damage) relating to any use of the data. Data must not be used for direct marketing or be used in breach of the privacy laws.South Australian DataThis information is based on data supplied by the South Australian Government and is published by permission. The South Australian Government does not accept any responsibility for the accuracy or completeness of the published information or suitability for any purpose of the published information or the underlying data.New South Wales DataContains property sales information provided under licence from the Land and Property Information (“LPI”). CoreLogic is authorised as a Property Sales Information provider by the LPI.Victorian DataThe State of Victoria owns the copyright in the Property Sales Data which constitutes the basis of this report and reproduction of that data in any way without the consent of the State of Victoria will constitute a breach of the Copyright Act 1968 (Cth). The State of Victoria does not warrant the accuracy or completeness of the information contained in this report and any person using or relying upon such information does so on the basis that the State of Victoria accepts no responsibility or liability whatsoever for any errors, faults, defects or omissions in the information supplied. Western Australian DataBased on information provided by and with the permission of the Western Australian Land Information Authority (2020) trading as Landgate.Australian Capital Territory DataThe Territory Data is the property of the Australian Capital Territory. No part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be directed to: Director, Customer Services ACT Planning and Land Authority GPO Box 1908 Canberra ACT 2601.Tasmanian DataThis product incorporates data that is copyright owned by the Crown in Right of Tasmania. The data has been used in the product with the permission of the Crown in Right of Tasmania. The Crown in Right of Tasmania and its employees and agents:a) give no warranty regarding the data's accuracy, completeness, currency or suitability for any particular purpose; andb) do not accept liability howsoever arising, including but not limited to negligence for any loss resulting from the use of or reliance upon the data.
Base data from the LIST © State of Tasmania http://www.thelist.tas.gov.au
Get in Touch
Eliza OwenHead of Research, AustraliaCoreLogic
Eliza.owen@corelogic.com.au
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