Activity increasing in higher priced markets Market activity is improving in the higher priced property markets as confidence in this sector continues to build. As 2009 progressed, the strength of the residential property market continued to improve. Initially the market improvement was fuelled by buyer activity at the affordable end of the price spectrum however, as the year continued, more expensive markets started to show an improvement in market share. National houses * The vast majority of house sales occur at prices below $400,000, in the first quarter houses in this price range accounted for 58.7% of all sales, by the third quarter they accounted for 51.5% of sales * As 2009 progressed the volume of sales within the price points below $400,000 fell whilst all price points above $400,000 saw their total market share increase, indicating a shift in the market toward higher priced houses. * During the first quarter sales of $1 million or greater accounted for 3.3% of national house sales, increasing to 5.1% during the third quarter. Graph: National qtr by qty 2009 house sales by price point Capital city houses * House prices tend to be more expensive in capital cities and this is reflected by the fact that the $300,000 to $400,000 price point has consistently had the greatest share of sales during 2009. * The less than $300,000 and the $300,000 to $400,000 price points have seen significant declines in market share over the year. * The losses in market share by those properties priced under $400,000 has resulted in increases in the proportion of sales in all price points above $500,000 whilst the $400,000 to $500,000 price point has seen a negligible change in its market share. * Despite the move away from lower priced stock during the year, capital city house sales at prices under $500,000 accounted for three out of every five sales during the third quarter of 2009. * The $1 million plus market saw strong growth during the year accounting for 4.7% of sales during the first quarter increasing to 7.5% by the third quarter. Graph: Cap City qtr by qtr 2009 house sales by price point National units * Nationally, unit sales recorded their greatest volume of sales at price points below $300,000. * Sales of units under $500,000 accounted for more than four out of every five sales during the first quarter, falling to just below four of every five sales (77.6%) during the third quarter. * Similar to what was experienced within the national housing market, price points below $400,000 recorded falls in market share after the first quarter whilst all price points above $400,000 recorded an increase in their share of sales during the second and third quarters. Graph: National qtr by qtr 2009 unit sales by price point Capital city units * Just like the national results, capital city units priced below $400,000 have seen market share eroded during the year with all of the more expensive market segments seeing market share increase. * During the first quarter three out of every five capital city unit sales occurred at prices below $400,000 by the third quarter these price points accounted for slightly more than half of all sales (53.5%). * Sales of units priced at or in excess of $1 million held a greater market share than either of the price points between $800,000 and $1 million during all three quarters. Graph: Cap City qtr by qtr 2009 unit sales by price point The change in market activity can largely be attributed to the improvement in buyer confidence amongst investors and non first home buyers. The market recovery was led by first home buyers who were motivated by historically low interest rates and the Government stimulus. As the economy continued to recover and business and consumer confidence improved, buyers became active in the higher priced segments of the market. With values up 11.3 percent over the first eleven months of the year we can also attribute some of the new market dynamic to bracket creep – where houses once priced under $300,000 are now achieving a value beyond $300,000. This is a trend that is likely to continue into 2010 where we expect fewer first home buyers and more investors / upgraders to be active in the market. The premium markets (ie top 20% of homes based on price) have already started. RPData
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