CoreLogic Australia Housing Market Update, Chart Pack - August 2018 by CoreLogic Asia Pacific

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Property market chart pack August 2018

Residential Real Estate Underpins Australiaâ&#x20AC;&#x2122;s Wealth Residential Real Estate

$7.6 Trillion

Australian Superannuation

$2.6 Trillion

Australian Listed Stocks

$1.8 Trillion

Commercial Real Estate

$0.995 Trillion

As at the end of July 2018

10.0 million Number of dwellings

$1.77 trillion Outstanding mortgage debt

52.2% Household wealth held in housing

458,742 Total sales p.a.

$292.9 billion Gross value of sales p.a.

Source: CoreLogic, APRA, RBA, ASX

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Both capital city and regional dwelling values have fallen over the past three months Quarterly change in dwelling values

Combined capitals

Quarterly change in dwelling values to Jul-18 National Combined regionals Combined capitals

Combined regionals

Regional NT Regional Tas Regional WA Regional SA Regional Qld Regional Vic Regional NSW

4% 2%

2.4% 0.9%

-3.5% 0.9% -0.6% 1.0% -0.2%

Canberra Darwin Hobart Perth Adelaide Brisbane Melbourne Sydney

0% -2% -4% Jul-90

-0.9% -0.2% -1.1%

Jul-97

Jul-04

Jul-11

Jul-18

-0.2% -1.0% 1.1%

-1.5% 0.7% 0.5%

-1.8% -1.1% -5%

-3%

-1%

Source: CoreLogic

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Value growth has slowed over the past year with a more rapid slowing occurring across the combined capital cities rather than the combined regional markets Annual change in dwelling values

50%

Combined capitals

Annual change in dwelling values to Jul-18 National Combined regionals Combined capitals

Combined regionals

40%

Regional NT Regional Tas Regional WA Regional SA Regional Qld Regional Vic Regional NSW

30% 20% 10%

Canberra Darwin Hobart Perth Adelaide Brisbane Melbourne Sydney

0% -10% -20% Jul-83

Jul-90

Jul-97

Jul-04

Jul-11

Jul-18

-1.6% 1.6%

-2.4% 4.7% 5.9% -4.8% 0.0%

0.2% 4.9% 2.1%

2.4% -6.2% 11.5% -2.3% 0.7% 1.2% -0.5% -5.4%

-15% -10% -5% 0%

5% 10% 15%

Source: CoreLogic

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Premium dwelling values have shown much greater declines than the more affordable housing stock Annual change in dwelling values by decile, Jul-18

Quarterly and annual change in dwelling values by deciles, National as at July 2018

10th

9th

8th 7th

6th

-2%

0.3%

-6.6% -4.5%

-1.5% -1.4% -2.2% -1.0% -1.3% -0.8% -0.2% -0.5%

5th 4th

-4%

3rd

-6%

Quarterly change

2nd

Annual change

1st

-8% 1st

2nd

3rd

4th

5th

Source: CoreLogic

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6th

7th

8th

9th

10th

-10% -5% Regional markets

-0.2% -0.3% -0.4%

-0.3% -0.1%

2.0% 2.4% 2.5%

1.7% 1.3% 1.2% 1.4% 2.1% 1.0% 1.9% 1.1% 0.7% 0.7%

5.3%

0% 5% Combined capital cities

10% National

Annual change in dwelling values

50% 40% 30% Sydney

20% 10% 0% -10%

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Sydney dwelling values have fallen by -1.1% over the 3 months to July 2018 and they are -5.4% lower over the past year with a year ago representing the peak in the Sydney housing market.

Source: CoreLogic

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Annual change in dwelling values

50% 40% 30% Melbourne

20% 10% 0% -10%

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Dwelling values have fallen by -1.8% over the three months to July 2018 in Melbourne. Over the past year, dwelling values are -0.5% lower and they are now -2.9% lower than they were at their peak in November 2017.

Source: CoreLogic

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Annual change in dwelling values

50% 40% 30% 20% 10% 0% -10%

Brisbane

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Brisbane home values increased by 0.5% over the three months to July 2018 and they were 1.2% higher over the past year. Over the past year, house values have increased by 1.3% while unit values have increased 0.8%.

Source: CoreLogic

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Annual change in dwelling values

50% 40% 30% 20% 10% 0% -10%

Adelaide

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Dwelling values in Adelaide increased by 0.7% over the three months to July 2018 and they are 0.7% higher over the past year. Adelaide house values were 0.7% higher over the past year while unit values were 1.1% higher.

Source: CoreLogic

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Annual change in dwelling values

50% 40% Perth

30% 20% 10% 0% -10%

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Perth dwelling values fell by -1.5% over the three months to July 2018 and they are -2.3% lower over the past year. Dwelling values in Perth are now -12.1% lower than they were at their peak in June 2014.

Source: CoreLogic

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Annual change in dwelling values

50% Hobart

40% 30% 20% 10% 0% -10%

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Dwelling values in Hobart rose 1.1% over the 3 months to July 2018 and are 11.5% higher over the past year. House values have increased by 12.4% over the past 12 months and unit values have increased by 7.4%.

Source: CoreLogic

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Annual change in dwelling values

50% 40% 30% 20% 10% 0% -10%

Darwin

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Darwin dwelling values fell by -1.0% over the three months to July 2018 and they are -6.2% lower over the past year. Dwelling values in Darwin are currently -21.9% lower than their historic peak.

Source: CoreLogic

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Annual change in dwelling values

50% 40% 30% Canberra

20% 10% 0% -10%

Combined capitals

-20% Jul-98

Jul-03

Jul-08

Jul-13

Jul-18

Dwelling values in Canberra fell by -0.2% over the three months to July 2018 and they are 2.4% higher over the past year. House values have increased by 3.5% over the year while unit values are -1.1% lower.

Source: CoreLogic

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Transaction numbers remain lower than a year ago due to fewer settled sales in most capital cities with Adelaide the exception Year on year change in annual sales

Number of settled sales, combined capitals

40,000

National

35,000

Combined regionals

30,000

Combined capitals

25,000

Canberra

20,000 15,000

-5.3% -12.4% -7.0%

Darwin

-8.8%

Hobart

-9.1%

Perth

10,000

-0.1%

Adelaide

5,000 0 Jul-98

-9.8%

Brisbane Melbourne

Jul-03

Jul-08

Jul-13

Note the sales volumes are modelled based on historic levels of revision however, they are still subject to revision. Furthermore, sales volumes do not account for off-the-plan purchases which upon completion are counted as sales at their contract date.

Jul-18

Sydney

0.2% -12.6%

-15.4% -17.3%

-25% -20% -15% -10% -5%

Source: CoreLogic

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The rate of annual rental growth is slowing fairly rapidly, particularly within the combined capital cities Annual change in dwelling rents

12%

Combined capitals

Annual change in dwelling rents to Jul-18

Combined regionals

10% 8% 6% 4% 2%

0% -2% Jul-08

Jul-10

Jul-12

Jul-14

Jul-16

Jul-18

National Combined regionals Combined capitals

1.6% 2.8% 1.2%

Regional NT Regional Tas Regional WA Regional SA Regional Qld Regional Vic Regional NSW

3.1% 8.7% -0.4% 4.0% 2.8% 3.4% 2.4%

Canberra Darwin -2.2% Hobart Perth Adelaide Brisbane Melbourne Sydney -0.4%

-5%

4.6% 10.0%

0.3% 2.2% 1.3% 2.9% 0%

10%

15%

Source: CoreLogic

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With capital city dwelling values falling as rents continue to rise, gross rental yields have started to increase from historic low levels Gross rental yields

Gross rental yields as at Jul-18

National Combined regionals Combined capitals

4.9%

3.4%

Regional NT Regional Tas Regional WA Regional SA Regional Qld Regional Vic Regional NSW

Combined capitals 3% Jul-08

3.7%

Jul-10

Combined regionals Jul-12

Jul-14

Jul-16

Jul-18

7.1% 5.8% 5.6% 6.2% 5.3% 4.5% 4.5%

Canberra Darwin Hobart Perth Adelaide Brisbane Melbourne Sydney

4.6%

5.7% 5.0% 3.9% 4.3% 4.4% 3.0% 3.2% 0%

Source: CoreLogic

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Homes are typically taking longer to sell with larger discounts compared to a year ago Average rate of vendor discounting, Combined capitals

Average days on market, Combined capitals

0.0%

100

-2.0%

80 60

-4.0%

-6.0%

-8.0% Jun 06

Jun 09

Combined caps Hobart Canberra Melbourne Brisbane Adelaide Sydney Perth Darwin

Jun 12

Jun 15

Jun 18

-3.7% -4.1% -4.9% -5.5% -6.4% -6.4% -8.4%

-10.8% -10.0%

-8.0%

-6.0%

-4.0%

Jun 09

Jun 12

Combined caps Darwin Perth Brisbane Adelaide Sydney Canberra Melbourne Hobart

-6.3%

-12.0%

0 Jun 06

-2.0%

0.0%

Jun 15

Jun 18

46 85 72

55 49 47 44 35 33

Source: CoreLogic

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Far fewer new properties are being advertised for sale than a year ago however, in the capital cities, a slower rate of sale means total listings are up on last year Number of new and total properties advertised for sale, 28 days to 29 July 2018 No of new listings

12 mth change (%)

No of total listings

12 mth change (%)

State

No of new listings

12 mth change (%)

No of total listings

12 mth change (%)

Sydney

5,772

-12.2%

26,161

21.3%

NSW

9,889

-10.3%

48,686

8.4%

Melbourne

6,756

-7.9%

30,358

11.7%

Vic

9,330

-6.8%

46,739

-3.7%

Brisbane

3,714

-3.3%

19,628

1.0%

Qld

8,639

-3.5%

61,510

-2.6%

Adelaide

1,582

-11.3%

7,806

-2.5%

2,212

-9.3%

16,639

-5.1%

Perth

2,944

-1.8%

20,337

2.3%

4,038

-3.6%

33,329

0.6%

799

-2.4%

4,587

-24.9%

Capital city

Hobart

350

10.8%

965

-22.4%

Tas

Darwin

171

3.0%

1,453

-9.7%

223

3.7%

2,062

-6.1%

Canberra

546

-7.0%

1,834

-0.3%

ACT

560

-6.7%

1,912

-0.1%

21,835

-7.5%

108,542

7.7%

National

35,690

-6.7%

215,464

-0.9%

Combined capitals

Source: CoreLogic

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Auction clearance rates have continued to trend lower and are now much lower than they were 12 months ago

4,500

90.0%

4,000

80.0%

3,500

70.0%

3,000

60.0%

2,500

50.0%

2,000

40.0%

1,500

30.0% 20.0%

1,000

10.0%

500

0.0% Jul-08

Jul-10

Jul-12

Jul-14

Jul-16

Number of auctions

Clearance rate

Weekly clearance rate, combined capital cities 100.0%

0 Jul-18

Source: CoreLogic

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Housing demand: overseas migration pulls back but population growth remains quite strong Quarterly change in national population

140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Dec-82

Rolling 4 qtr average

Dec-87

Dec-92

Net overseas migration

Dec-02

50,000

80,000

45,000

AUST ACT NT TAS WA SA QLD VIC NSW

35,000

40,000

30,000

20,000

25,000 Dec-97

Dec-07

Dec-17

20,000 Dec-87

Dec-97

Dec-07

Dec-12

Dec-17

Annual change in population

40,000

60,000

Dec-07

Natural increase

100,000

0 Dec-87

Dec-97

Dec-17

0.0%

1.7%

2.1% 0.4%

1.0% 0.8% 0.6% 1.7% 2.4%

1.6% 0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Source: CoreLogic, ABS

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Although dwelling approvals are down from their record high levels they remain well above long-term average levels Number of dwellings approved for construction, National

14,000 Houses

Units

Rolling 6 mth average

12,000 10,000 8,000 6,000 4,000 2,000 0 Jun-88

Jun-93

Jun-98

Jun-03

Jun-08

Jun-13

Jun-18

Source: CoreLogic, ABS

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Mortgage demand is trending lower across the board with the greatest reduction in demand from investors Value of housing finance commitments by borrower type

$18.0

$16.0 $14.0

($b)

$12.0

Owner occupier FHB Owner occupier non-FHB Owner occupier refinance Investors

$10.0 $8.0 $6.0 $4.0 $2.0

$0.0 May-98

May-02

May-06

May-10

May-14

May-18

Source: CoreLogic, ABS

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While previous housing cycles have generally been dictated by changes in interest rates, the current slowdown has been heavily influenced by changes in credit availability Annual change in credit, owner occupier v investor loans 50%

% of mortgages originated on interestonly terms 45.6%

45%

40% 35%

15.0% 12.5% 10.0% 7.5% 5.0% 2.5% 0.0% Jun-08

30%

7.8% Owner occupier housing

Jun-10

1.6%

Investment housing

Jun-12

Jun-14

Jun-16

Jun-18

% of mortgages settled with an LVR 80%+

40% 35% 20% 30% 25% 15% 15.7% 20% 10% 15% Mar-08 Mar-10 Mar-12 Mar-14 Mar-16 Mar-18 Mar-08 Source: CoreLogic, APRA, RBA 25%

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37.6%

19.7% Mar-10

Mar-12

Mar-14

Mar-16

Mar-18

Over the past month, average three year fixed mortgage rates have fallen by 5 basis points Standard variable mortgage rates over time 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% Jul-58

Jul-63

Jul-68

Jul-73

Jul-78

Jul-83

Jul-88

Jul-93

4.35%

Variable, discounted

5.10%

Variable, standard

5.80%

Variable, 3-year fixed

4.10%

Variable, discounted

4.50%

Variable, standard

5.20%

Investor

Variable, 3-year fixed

Jul-03

Jul-08

Jul-13

Jul-18

Change in avg mortgage rate since low point, Jul 2018

Owner occupier

Investor

Avg mortgage rate by product type, Jul 2018

Jul-98

Variable, 3-year fixed

0.20%

Variable, discounted

0.40%

Variable, standard

0.30%

Variable, 3-year fixed

0.10%

Variable, discounted Variable, standard

0.05% 0.00%

Source: CoreLogic, RBA

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Commercial Market Update August 2018

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Over July, there were 1,959 new projects captured across Australia, at a combined value of $18 billion • Number of new projects captured by Cordell: − The number of new projects fell 5% over the July quarter, to 4,932 − The number of new projects in the year to July fell 12%, to 21,481

• Value of new projects captured by Cordell: − The value of new projects rose 20% in the July quarter, to $48 billion − The value of new projects declined 1% in the year to July, to $178.5 billion

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Over July, there were 867 projects commencing across Australia, at a combined value of $7.4 billion • Number of commencing projects captured by Cordell: − The number of commencing projects rose 18% over the July quarter, to 2,831 − The number of commencing projects in the year to July fell 2%, to 9,872

• Value of commencing projects captured by Cordell: − The value of commencing projects rose 52% in the July quarter, to $25.3 billion − The value of commencing projects rose 18% in the year to July, to $68.5 billion

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CoreLogic preliminary results suggest an average commercial auction clearance rate of 53.9% over July

Share of Commercial Auction Sale by Type, Australia Wide â&#x20AC;&#x201C; July 2018

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Industrial

Retail

Hotel & Leisure

Office

Medical & Misc.

45%

21%

28%

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 Data Based on or contains data provided by the State of Queensland (Department of Natural Resources and Mines) 2018. In consideration of the State permitting use of this data you acknowledge and agree that the State gives no warranty in relation to 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 Data This 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 Data Contains 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 Data The 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 Data Based on information provided by and with the permission of the Western Australian Land Information Authority (2018) trading as Landgate. Australian Capital Territory Data The 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 Data This 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; and b) 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 Our Insights. Your Story.