Tim Lawless of CoreLogic RP has presented his end-of-year wrap for 2015, describing growth conditions across the national housing market as 'diverse'.
At the end of 2015 the total value of Australian residential property reached an estimated $6.3 trillion, up from $5.7 trillion a year earlier, easily making residential property the nation's single largest asset class. Approximately $283 billion worth of housing stock transacted over the year across roughly 500,000 house and unit sales.
Mr Lawless said despite some headlines to the contrary, Sydney and Melbourne were the only capital cities to see substantial increases in values. While CoreLogic's RP Data Home Value Index showed combined capital city home values rose by 8.7% over the 12 months to November 2015, only Sydney (12.8%) and Melbourne (11.8%) recorded double digit growth. Brisbane (4.0%), Adelaide (3.3%), Hobart (1.1%) and Canberra (4.5%) each recorded relatively moderate value rises while values fell by -4.1% and -4.2% respectively in Perth and Darwin.
Regional housing market performances were also quite diverse with coastal lifestyle markets typically recording value rises whilst markets linked to the resources sector have continued to see values and transaction activity slump.
We have also seen lending criteria tightened significantly by lenders, particularly to investors, and this has resulted in a sharp slowdown in lending to domestic investors over recent months.
First home buyers numbers didn't do much in 2015, but may increase next year given a reduction in competition from investors. Meanwhile, the housing construction market is booming. We are seeing more units, particularly high-rise units, approved for construction than ever before. Over the past 12 months there have been 116,111 houses approved for construction and 117,072 units.
As we head into 2016, Mr Lawless said housing market conditions were starting to pick-up in South-East Queensland and potentially other markets like Canberra and Hobart as well. Of course the changed lending environment will continue to be a factor in the market in 2016, however, interest rates are set to remain at their historically low setting which will continue to spur demand across the housing market.