Top Buyers’ Markets

January 18th, 2016
People in the market for a new home are looking forward to a great year ahead, with Australian markets starting to favour buyers for the first time in four years. According to the latest Commonwealth Bank CoreLogic RP Data Home Buyers Index, the Brisbane and Darwin markets have already shifted in favour of buyers, with other cities likely to join them if the strong growth of 2015 continues to ease. While Sydney and Melbourne are still favouring sellers, price growth is likely to slow down and become more consistent in 2016.

The October quarter of the Home Buyers Index (HBI) can be a good indicator of the year ahead, with the latest report finding a significant shift in a number of key markets. The HBI compares the number of properties for sale with the number of loans being taken out, with a buyers' market said to exist when properties outnumber mortgage commitments and a sellers' market said to exist when home loans outweigh available properties.

At a state-level, the most favourable buying opportunities are in Queensland, Western Australia, Tasmania, and the Northern Territory. New South Wales and South Australia remain balanced, with Victoria and the Australian Capital Territory favouring sellers. On a city-level, Brisbane and Darwin favour buyers while Sydney, Melbourne, Canberra, and Adelaide favour sellers.

On a regional-level, the top five buyers' markets in the country are Northern, SA; Wide Bay-Burnett, QLD; Central West, Qld; Far West, NSW; and Pilbara, WA. The top five sellers' markets are Sydney, NSW; Melbourne, VIC; Adelaide, SA; Canberra, ACT; and Central Highlands, VIC. According to Dan Huggins, executive general manager of home buying at Commonwealth Bank, “While the national property market remains balanced, Brisbane, Darwin and Adelaide have experienced the most notable shifts. Brisbane and Darwin have moved in favour of buyers, while Adelaide’s moved in favour of sellers.” ; ;

The HBI is not the only indicator pointing towards slowing market conditions, with the latest CoreLogic data also showing a drop off in prices over the last two months. According to CoreLogic, national home values dropped 1.2 percent in December and 1.4 percent in November - the first time since May 2013 that prices have fallen for two successive months. Auction clearance rates are also dropping, from close to 90 percent in some markets during autumn down to 55 percent in December.

According to HIA senior economist Shane Garrett, "The market is definitely slowing, with growth slowing people can (now) make better decisions... A more consistent market means both buyers and sellers can see what’s really going on... Activity is at such a high level… it can’t be kept at such a high level... There’s also the fact that population growth is slowing and less people are coming here from overseas to work as the international (economic) conditions are improving.”

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