Property sales increased across much of Australia during the past year, with two capital cities recording significant boosts. But one property commentator has warned that government policy may be distorting the figures.
Onthehouse's September property market update has shown that annual sales activity has grown in all major capitals except Sydney, Perth and Darwin.
Melbourne saw the highest sales growth in houses, while Adelaide’s unit market recorded the country’s strongest results.
Melbourne’s housing market increased sales by 15.3 per cent to 51,015 in the year ending August 2015, while the city’s unit sales rose 12.6 per cent to 39,706 over the same period.
Adelaide’s unit sales rose 12.7 per cent to 5,163, while house sales increased 4.5 per cent to 19,203.
Property author and academic Peter Koulizos explained that the reason for the rapid rise in apartment sales in the traditionally house-oriented market was down to generous government stamp duty concessions on new developments, such as those in the suburb of Bowden.
“In Bowden – and I reckon there’s one other spot north east, just north east of the CBD – they’re offering some great concessions. That would be the reason, not because we've all changed our mind and want to live in apartments, it’s because the government’s saying, ‘if you buy an apartment, you don’t have to pay so many fees’."
Mr Koulizos added: “It’s part of an effort to improve the population within the CBD. They want to increase the population, they want to increase the density and also near the CBD [...] from their point of view, public transport is more economically viable by encouraging people to buy apartments in transit-oriented developments like Bowden.”
He warned investors to steer clear of the developments, despite being well-built and ideally situated.
“As a government policy, that’s great. I think the more people you can get into housing, that’s great. From an investment point of view, not so good, because apartments don’t have very good long-term capital growth due to the limited land component and the opportunity for oversupply and the huge body corporate fees that can go with it," he said.
Hobart recorded the second-highest growth in house sales with an increase of 10.7 per cent to 2,198, but units fell 3.7 per cent to 671.
In Brisbane, house sales jumped 4.8 per cent to 39,774 and unit sales rose 10.27 per cent to 19,318.
The ACT’s house sales rose 0.9 per cent to 4,744 and unit sales increased 9 per cent to 3,567.
In Sydney house sales fell two per cent to 46,748 and unit sales dropped 3.2 per cent 45,242, while Darwin’s house sales dropped 10.6 per cent to 1,251 and units fell 31.4 per cent to 551, and Perth house sales fell 13.3 per cent to 25,060 and units dropped 17.1 per cent to 10,913.
National house sales rose 3 per cent to 334,497 for the year and unit sales increased 2.8 per cent to 162,824.