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Historic data from CoreLogic has shown that timing is everything when it comes to property purchases.
New analysis from the data firm has revealed that 2021 is the most common year in which homes were last purchased, with an estimated 549,000 homes last sold during the 12-month period – or 5.3 per cent of housing stock.
It was a year defined by the fear-of-missing-out, when COVID-19 instability had recently caused a slight dip in prices, Aussies were cashed up due to time spent at home, and interest rates were at record lows and projected to stay that way for a while.
Buyers who made quick moves in 2020 were now enjoying the benefits of home ownership and many Aussies worried that they would miss out on a good thing if they didn’t follow suit. But 2021 gave rise to some of the biggest price changes in the history of Australian real estate, and CoreLogic’s findings show that while 2021 may have been the most popular year to buy in recent history, purchasers need not have been so hasty.
CoreLogic’s head of research Eliza Owen explained that “at a national level, home values have increased 7.6 per cent since the end of 2021, which is not as strong as the returns for those that bought a year later, when market values saw a short, sharp dip in response to rising interest rates, before rebounding to new record highs”.
The data revealed that home values have increased on average 13.1 per cent since 2022.
Added to that, average mortgage rates for outstanding owner-occupied borrowers at the end of 2021 have increased 335 basis points, which Owen said likely led to “greater sticker shock” for 2021 buyers, who have on average seen their mortgage repayments increase by roughly 50 per cent since their purchase date.
Of course, the national statistics often belie individual market trends, and each capital city has a different story to tell.
Hobart, for example, records older than average purchase dates across its property landscape. The most common last sale date in Hobart was 2017, when 4 per cent of homes were last purchased. Those who bought in 2017 are likely to have seen an increase in the value of their home, with CoreLogic’s home value index for Hobart rising 45.7 per cent between December 2017 and July this year.
While property investing is often thought of as a long-term game, CoreLogic data shows that over the past five years, one in five homes cycled through the property market.
That rate is much higher in certain capitals where investing potential has been keenly eyed.
Perth has seen the highest portion of stock sold over 2024 to date, at 3.2 per cent, while Brisbane has seen the highest portion of stock transacted in the past five years, at a whopping 24.6 per cent.
In terms of CoreLogic’s predictions for 2024, Owen said that the year is likely to end with 4.9 per cent of housing stock expected to record new dates of sale.
Those buyers, however, will need to be prepared to wait to see their investments pay off.
“Buyers in 2024 may not see a strong capital growth return in the short term, but mortgage serviceability is likely to become more manageable over time, with consensus pointing to a decline in the cash rate through 2025 alongside income growth,” Owen said.
“Whether turnover rates will pick up in 2025 is uncertain. While a loosening in monetary policy should help to boost confidence and lift borrowing capacity, affordability constraints are likely to remain as a barrier to home purchasing, especially for those who have found it hard to save amid the recent history of high cost of living pressures,” she added.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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