Part 4 of our stuff worth knowing posts.
This week we cover detached house sales.
Three tables follow.
Tables 1 and 2 outline the number of detached houses and median values across the eight capital cities and other top 20 major urban spaces in Australia.
Market size is important. Too often real estate conversations are focused on price and, more often than not, the movement in price. Not enough is said about sale volumes.
We have been hearing of late that regional towns are experiencing a real estate boom.
When I read about such stuff, my first reaction is to think how big a particular place is – in terms of sales – and then compare that market size with a place I know better, such as a mainland capital. This helps me better visualise what is actually being said.
Revisiting table 2 outlines that many of our major regions are quite small when it comes to annual house sales and it doesn’t take much of an increase in sales to feel like an area is ‘booming’.
It pays to understand market size when it comes to buying, as it will be important when it comes to selling.
To that end, table 3 outlines the size of the capital city’s housing markets by price group.
Whilst there is a lot more to moving to a particular area that just the cost of housing, table 3 shows why the smaller capitals have increasing appeal. The same applies to many regional markets too.
So, when it comes to market size, I think it is important to understand both the quantum of relevant dwelling sales and also how many sales take place in your price range.
Tables 1 and 2 also outline recent movement in sales volumes and median values.
Some areas have seen a decline in sales but increases in median values. That might seem illogical, but one of the key rudiments of real estate is to know both demand (sales) and supply. Sales might be falling but if the supply has contracted more, then prices can still rise.
Of course, if sales are increasing and supply is falling, there is a greater likelihood of prices increasing. But more on that next week.