Housing Bubble

Housing Supply Under $400,000 Dries Up

www.first2move.com.au

The ongoing increases in dwelling values over recent years has led to a significant reduction in the proportion of sales occurring below $400,000.

In last week’s Property Pulse we looked at the proportion of dwellings selling for at least $1 million and showed how it has increased significantly over recent years.  This week we look at the other end of the spectrum how the lift in values has led to a significant drop in the proportion of dwellings selling below $400,000.

Across the nation, 31.2% of houses and 37.3% of units sold transacted for less than $400,000.  By comparison, a year ago the proportions were recorded at 32.8% for houses and 38.6% for units.  A decade ago, 62.4% of all house sales and 68.9% of unit sales were priced below $400,000.

Annual % of sales below $400,000, National

There are far fewer properties selling below $400,000 in capital cities than there are in regional areas of the country. 

16.8% of all house sales and 28.4% of all unit sales over the 12 months to June 2017 were below 400,000.  Even comparing these figures to just a year earlier the decline in the proportion of sales under $400,000 is extremely noticeable for houses (19.0%) and somewhat less so for units (29.6%).  A decade ago, more than half of all capital city house (53.1%) and unit (66.3%) were less than $400,000.

Annual % of sales below $40,000,

Combined capital cities

Outside of the capital cities, 52.0% of houses and 60.5% of units sold over the 12 months to June 2017 were priced below $400,000.  A year earlier the proportions were recorded at 54.3% for houses and 63.2% for units.  If we go back 10 years more than three quarters of regions house (75.6%) and unit (75.2%) sales were less than $400,000. 

Annual % of sales below $400,000

Combined regional areas

Over the past year, less than 3.5% of all house sales in Sydney and Canberra were below $400,000 compared to 35.5% and 40.0% respectively a decade ago.  In a market like Sydney, the unit market doesn’t even represent much of an alternative with 7.4% of all unit sales over the past year below $400,000 compared to 53.9% a decade ago.

(Source: CoreLogic)