When assessing the new residential land property market we look at many factors but in general there are three broad categories of property data that we use to create a snapshot.
When assessing the new residential land property market we look at many factors but in general there are three broad categories of property data that we use to create a snapshot. The Leading Data, which includes how easy it is to rent or sell an existing property (REIWA); the Current Data, which looks at land sales (UDIA & Landgate); and the trailing data, which includes Building Finance and Building Approval data (ABS).
The rental vacancy rate is important because a tight rental market means more people consider buying their own home. At the moment the rental vacancy rates are roughly double what they were earlier in this cycle so that is not a market driver at the moment.
If you decided to sell your home at the moment it would take less than two months (59 days) on average according to REIWA data, just two days longer than last quarter but ten days longer than the same time last year. This is not seen as a brake on the market as it is around the time frame people expect, unlike in March 2012 when it took on average 79 days. The number of properties on the market fell by five hundred since last quarter to remain well below the high of 17,764 in March 2011. The data to watch is the falling sales volumes for existing housing, however that only becomes a concern if it results in stock levels rising and increases the average time on the market.
The UDIA sales volume survey for developer lots in Greater Perth is still a very solid 120% of the rolling five year average, having fallen 8.7% from last year’s record highs. This slight cooling is positive as timelines for new lots have fallen from last year’s high of nine months to the more standard six month wait. Quarter-on-quarter lot sales have held steady through winter with just a 2.3% fall.
The trailing data, the conversion of lots to new homes, is still strong. According to the ABS data, Building Approvals for private housing is at record levels year-to-date, with a full year record the likely outcome. Housing finance commitments for the construction of new dwellings is also very strong, up 13.2% on the same time last year.
The residential property market is going well with the bonus of some well priced opportunities becoming available as the power shifts slightly back in favour of the buyer.