REA Group has released their Property Demand Index for November 2016 showing variable results across capital cities with weakening demand in some locations and a stabilisation in demand.
“Perhaps there is a sense of nervousness among Australians following the recent US election, because demand levels stabilised in November, increasing by just 0.1% during the month,” commented REA Group Chief Economist, Nerida Conisbee.
US election hangover aside, the slowing was driven by dropping demand in Queensland, potentially fuelled by concerns around the Brisbane CBD apartment market, and also Australian Capital Territory.
“Despite a relatively stable month for demand nationally, all states continue to see the increases in demand levels overwhelming the slight decline in listings volumes over the year to date.
“Tasmania is still seeing elevated levels of demand and is now the most in demand market in Australia, with affordability the key factor driving this interest.
“New South Wales saw a small decline in demand, driven primarily by affordability issues in Sydney, now likely the most expensive city in the world by income to price ratio. Victoria, despite continued concerns of apartment over development in Melbourne’s CBD, saw demand increase by 3.3%.
“Western Australia and Northern Territory continue to experience lower levels of demand, however both states recorded an uplift in demand for the month of November and the year to date. The result suggests barring any surprising negative economic news or changes to the supply outlook, the bottom of the housing market is close,”she concluded.
Key finding in the November Index are:
Demand stabilised in November
- Demand levels grew by just 0.1% in November, a significant slowdown from previous months.
- Australian Capital Territory, New South Wales and Queensland all saw a drop over the month of November with Australian Capital Territory experiencing the largest decline for both houses and units.
- Tasmania continued its strong increase to become the most in demand state for dwellings in Australia. Victoria and Northern Territory also saw strong increases in November.
- On an annual basis, all states continue to see increases in demand levels overwhelming the slight decline in listings volumes.
Variable results across capital cities shows weakening demand in some locations
- Tasmania continues its surprising surge in demand for both units and houses. The index is highest in this state for both of these dwelling types, likely driven by growing interest in affordable locations.
- Housing demand saw a decline in New South Wales, Australian Capital Territory and Queensland, while apartment demand declined in Australian Capital Territory, Queensland and South Australia.
- On an annual basis, all states continue to see increases in demand levels overwhelming the slight decline in listings volumes.
Source: REA Group Property Demand Index – November 2016
