The decline in home sales in Australia will have an impact on the property industry, the broader economy and people who care about house prices, according to the Domain.
Australia`s housing turnover rate is reported to be at its lowest level since 2013, while Melbourne and Sydney are at their lowest level in 20 years.
(Domain image)
What is the reduction in the number of homes sold in Australia?
First, house prices in Australia fell for the first time in years. When owners realize that their property is worth less than it was a few months ago, they are even more reluctant to sell their homes because they fear they will lose more than their earnings.
Second, as house prices fall, sellers adjust their expected prices at a slower rate, leading to a sell-off or withdrawal from the auction, as reflected in the fall in the liquidation rate.
Moreover, stamp duty also has an impact on housing turnover. The increased cost of moving has prompted many to give up moving closer to better jobs, or to homes of more suitable size. Despite recent home price declines, stamp rates have not changed much in most states and territories. Compared with the increase in wages, the increase in stamp duty caused by the rise in median house prices is even more pronounced.
In addition, the boom in apartment construction in Sydney, Melbourne and Brisbane also led to a decline in recorded housing turnover. Because most of the new apartments are sold in promissory form, that means a period of up to three years from signing a contract to getting the keys to the house. As a result, many apartments are not accounted for in the housing turnover data because they have not yet been settled.
In addition, interstate and intra-state migration has declined since the mid-2000s, affecting housing turnover.
