2018 08--cl18 quarterly-economic_and_property_review

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Quarterly Economic Review
The Australian Residential Property
Market and Economy
June 2018 quarter
Released August 2018

Market and Economy
Introduction 3
Housing Market 4
State-by-state breakdown 10
Mortgage Lending 34
Housing Supply 40
Demographic Overview 43
Household Finances 46
National Accounts 48
Inflation 49
Consumer Sentiment 50
Conclusion 51
About CoreLogic 53
Disclaimers 54
Contents

Market and Economy
Over the second quarter of 2018, national dwelling
values have declined by -0.5%, matching the -0.5% fall
in values over the March quarter. Throughout the 12
months to June 2018, national dwelling values have
decline by -0.8%. Although a -0.8% fall isn’t overly
large, it is the greatest annual fall in values since
September 2012 when values had fallen -1.1% over
the year.
While the headline figure is recording falls largely due
to declines in Sydney and Melbourne dwelling values,
housing market conditions have also softened in most
other capital cities. In fact, Brisbane, Adelaide and
Hobart are the only capital cities where dwelling values
remain at peak levels. In Perth and Darwin, values
have been below their peak since 2014, while markets
such as Sydney, Melbourne and Canberra have also
entered a downturn. Even in Brisbane and Adelaide,
where the pace of capital gains has been relatively
sustainable, the rate of value growth has slowed over
the past 12 months.
Weaker housing market conditions at the national level
are primarily being influenced by a downturn across the
capital city regions; especially the largest housing
markets, Sydney and Melbourne. Regional housing
markets have seen value growth slow over the past
year however, values remain in positive territory, at
least at a macro level. Despite the more resilient
conditions across regional markets, CoreLogic indices
data has recently indicated a slowing of value growth in
most regional NSW housing markets and on the Gold
Coast while regional areas of Vic and the Sunshine
Coast are seeing the rate of value growth accelerate.
The current decline in values across the Australian
housing market is quite different from previous
downturn which have typically been triggered by a
change in monetary policy (interest rates) or via an
economic shock (such as the Global Financial Crisis).
The current downturn has occurred on the back of
changed credit regulation which has resulted in much
tighter credit conditions. Since late 2014, the
Australian Prudential Regulation Authority (APRA) has
implemented a number of measures designed to
remove some of the risks in the mortgage market and
tighten lending policies. These changes have included,
but not been limited to: calculating mortgage
serviceability on a mortgage rate in excess of 7%, a
10% speed limit on annual investor credit growth for all
lenders, limiting the flow of new lending for interest-only
purposes to a maximum of 30%, requiring lenders to
more accurately assess income and expenses and a
more detailed understanding of borrower’s existing
debts.
The repercussions for borrowers of these changes to
lending policies is that the availability of credit has been
tightened. Investor and interest-only mortgages have
become less readily available and those wanting to
take out these types of mortgages are being charged
higher mortgage rates. The amount that borrowers are
able to borrow for a mortgage has been reduced and
more information is required when applying for a
mortgage.
An immediate impact of these changes have been a
sizeable fall in lending to investors who were, in
Sydney and Melbourne in particular, a major source of
mortgage demand over recent years. Although new
housing finance commitments to investors is still well
above long-term averages in NSW and Vic it has
declined substantially from the peak levels.
Australia has also seen a boom over recent years in
new housing construction, particularly for units in
Sydney, Melbourne and Brisbane where the number of
apartments built reached unprecedented levels. Many
of these new units had been purchased by investors
‘off the plan’ and we are seeing some evidence that
more units are settling with a valuation lower than than
the contract price and there is a heightened supply of
rental accommodation which is leading to a slowing of
rental growth. This has been apparent in Brisbane for
some time but rental growth is now also slowing in
Sydney and Melbourne.
Low mortgage rates have not been enough to avoid
recent dwelling value declines. While housing
affordability is stretched in Sydney and Melbourne and
falls are somewhat understandable considering the
strong run up in prices, tighter new lending policies are
likely a key driver of the housing market weakness.
With a Royal Commission into the banking and
financial services sector underway, it is reasonable to
expect that getting a new mortgage is set to remain
more challenging relative to previous years for some
time. Given this, it is reasonable to anticipate that
dwelling values are likely to continue to decline over
the coming quarters, particularly in Sydney and
Melbourne where investment demand has been the
strongest and where affordability pressures are the
most pronounced. it will be important to monitor the
extent to which any weakness in Sydney and
Melbourne infects other housing markets across the
country.
Introduction
$7.6 trillion $2.6 trillion $1.8 trillion $0.995 trillion
Value of Residential
Property
Value of Australian
Superannuation
Value of Listed Equities Value of Commercial
Real Estate

-4.5%
1.0% 1.1% 1.1%
-2.1%
12.7%
-7.7%
2.3%
-1.6%
2.2%
-0.8%
-10%
-5%
0%
5%
10%
15%
Change in dwelling values,
12 months to June 2018
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Quarterly and annual change in national dwelling values
Quarterly change Annual change
Market and Economy
► National dwelling values fell by -0.5% over the
second quarter of 2018, with values also falling -
0.5% over the first quarter of the year.
► Combined capital city dwelling values fell -0.8%
over the quarter while combined regional areas saw
values increase 0.6%.
► Both capital city and regional markets are recording
slower quarterly growth than they were a year ago.
► Values were lower over the quarter in Sydney (-
0.9%), Melbourne (-1.4%), Perth (-0.7%) and
Darwin (-0.8%) while they increased in Brisbane
(+0.3%), Adelaide (+0.9%), Hobart (+2.3%) and
Canberra (+0.2%).
► Over the 2017-18 financial year, national dwelling
values fell by -0.8% with combined capital city
values -1.6% lower and combined regional market
values 2.2% higher.
► The rate of value growth has slowed substantially
over the past financial year, from +10.2% annually
a year ago nationally, +11.1% a year ago across
the combined capital cities and +6.4% a year ago
across the combined regional markets.
Housing Market
► Over the past 12 months, national dwelling values
have fallen by -0.8%, their largest fall since
September 2012.
► Across the combined capital cities the -1.6% annual
fall is the largest since August 2012 while the 2.2%
increase across the combined regional markets is
the slowest growth since April 2015.
► Values increased over the past year in Melbourne
(+1.0%), Brisbane and Adelaide (both +1.1%),
Hobart (+12.7%) and Canberra (+2.3%).
► Dwelling values were lower over the past 12
months in Sydney (-4.5%), Perth (-2.1%) and
Darwin (-7.7%).
► The -4.5% fall in Sydney dwelling values over the
past year was a substantial slowdown from the
+16.4% increase a year earlier. In fact, the -4.5%
fall was the largest decline since March 2009 and
the largest financial year fall on record. Over the
past year, house values have fallen by -6.2% and
unit values are -0.7% lower.
► The +1.0% annual increase in Melbourne dwelling
values was the slowest rise since January 2013
and well down on the +13.0% increase a year
earlier. Over the past year house values are +0.2%
higher and unit values are +3.7% higher.
National dwelling values declined by -0.5% over the first quarter of 2018
The annual change in dwelling values is lower than a year ago in all capital cities except for Perth

-1.6%
3.9% 5.1% 5.3%
1.9%
18.3%
-2.4%
6.9%
1.6%
7.3%
2.7%
-5%
0%
5%
10%
15%
20%
Total returns over the 12 months to June 2018
Market and Economy
► Brisbane’s annual value growth has slowed from
+2.8% a year ago to +1.1% over the past year.
House values have risen by +1.2% over the past
year and unit values are +0.7% higher.
► The +1.1% annual increase in Adelaide dwelling
values represents a slowdown from the +5.4%
increase a year earlier. Over the past year, house
values have increased +1.2% and unit values are
+0.3% higher.
► Perth dwelling values fell by -2.1% over the past
year however, this was a more moderate decline
than the -2.6% a year ago. House values have
fallen by -1.7% over the past year while unit values
are -3.8% lower.
► The annual change in Hobart dwelling values
(+12.7%) is fairly steady compared to last year
(+12.8%). House values are +13.8% higher over
the year and unit values are up +7.2%.
► Darwin dwelling values were -7.7% lower over the
past year compared to a -2.6% fall a year earlier.
House values have fallen by -4.9% over the year
while unit values are -13.4% lower.
► Canberra annual dwelling value growth slowed
from +7.8% a year ago to +2.3% over the past
year. House values have increased +3.3% over
the year while unit values are -0.8% lower.
Total returns from housing are the lowest they’ve
been since July 2012
► The +2.7% total return from housing, which factors
in the gross annualized rental yield as well as
annual capital gains was the lowest annual return
since July 2012.
► Total returns have fallen substantially over the past
year; a year ago they were recorded at +14.5%.
► Total returns across the combined capital cities
were recorded at +1.6% over the past year, their
lowest returns since June 2012.
► Hobart was the only capital city in which double
digit returns were generated over the past 12
months.
► Returns across all capital cities were lower over the
past year than they were a year ago highlighting
the impact of slowing value growth and weakening
rental growth.
► Sydney’s total returns have fallen from +20.1% a
year ago to just -1.6%, the lowest they’ve been
since February 2009.
► Over the past five years, total returns nationally
have been recorded at 10.1% p.a. while Sydney
(12.8% p.a.), Melbourne (11.7% p.a.) and Hobart
(12.3% p.a.) have generated much higher returns,
while returns in Perth (2.2% p.a.) and Darwin (0.8%
p.a.) have been much lower.
Housing Market

89.4% 86.8%
19.7% 22.0%
3.8%
42.8%
-2.4%
31.5%
61.7%
23.7%
52.6%
-20%
0%
20%
40%
60%
80%
100%
Change in dwelling values,
January 2009 to June 2018
-4.8%
-2.0%
0.0% 0.0%
-11.4%
0.0%
-22.2%
-0.4%
-2.2%
0.0%
-1.3%
-25%
-20%
-15%
-10%
-5%
0%
5%
Change in dwelling values from market peak to June 2018
Market and Economy
► Dwelling values nationally are now -1.3% lower
than their September 2017 peak.
► While combined capital city dwelling values are -
2.2% lower than their September 2017 peak,
combined regional market values are continuing to
rise to new highs.
► Brisbane, Adelaide and Hobart are the only
individual capital cities in which values are currently
at historic highs.
► After values peaked in July 2017 in Sydney, they
have fallen by -4.8% over the space of 11 months.
► Melbourne dwelling values peaked in November
2017 and they have since fallen by -2.0% in 7
months.
► Perth dwelling values currently sit -11.4% lower
than their peak which occurred all the way back in
June 2014.
► Darwin dwelling values reached an historic-high in
May 2014 and they have since fallen by -22.2%.
► Canberra dwelling values have declined over the
past two months and are currently -0.4% lower than
their peak.
► In most of the capital cities where values are falling
the declines have started fairly recently however,
these declines are anticipated to continue for some
time.
Housing Market
Many capital cities are now seeing values which are below their peak
► In 2008, during the Global Financial Crisis, capital
city dwelling values fell by -7.9% between March
2008 and January 2009, but with stimulus
measures such as lower interest rates and a ‘boost’
to first home buyer grants, dwelling values began to
rise thereafter.
► As has been the case with the most recent growth
phase, since the global financial shock it has been
the two largest capital cities that have seen
substantial value growth while other capital cities
have recorded relatively moderate increases in
values.
► The relative strength of the Sydney and Melbourne
economies, strong migration into those cities and a
relatively low supply of stock available for sale has
supported this growth in dwelling values while
these conditions have generally not been apparent
in other capital cities.
► Note that although Sydney and Melbourne have
recorded the strongest growth over this period,
values are now falling in both of these cities with
declines more rapid in Sydney.
► Outside of Sydney and Melbourne, growth has
generally been minimal over the period, except in
Hobart where value growth has ramped-up over the
past three years.
Housing market growth conditions have been significantly skewed towards Sydney and Melbourne over the past
decade

0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Monthly number of settled dwelling sales
Monthly sales 6 month average
$1,012,368
$821,463
$537,647
$466,569
$485,296
$460,609
$494,716
$673,988
$694,764
$373,586
$573,216
$752,625
$574,304
$386,685
$328,842
$400,762
$355,554
$322,988
$437,596
$575,685
$343,536
$517,988
$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000
Sydney
Melbourne
Brisbane
Adelaide
Perth
Hobart
Darwin
Canberra
Combined capitals
Combined regions
National
Median house and unit values as at June 2018
Units Houses
Market and Economy
► At the end of June 2018, the national median value
of a house was recorded at $573,216 and the
median unit value was $517,988, a gap of 10.7%
► When you split the results individually across the
combined capital cities and combined regional
markets, the gap between house and unit values is
wider in the capital cities (20.7%) and narrower in
the regional markets (8.7%).
► Across the individual capital cities, the premium for
houses over units is recorded at: 34.5% in Sydney,
43.0% in Melbourne, 39.0% in Brisbane, 41.9% in
Adelaide, 21.1% in Perth, 29.5% in Hobart, 53.2%
in Darwin and 54.0% in Canberra.
► In dollar terms the gaps between house and unit
prices are recorded at: $259,743 in Sydney,
$247,159 in Melbourne, $150,962 in Brisbane,
$137,727 in Adelaide, $84,534 in Perth, $105,054
in Hobart, $171,728 in Darwin and $236,392 in
Canberra.
► Sydney houses are much more expensive than
houses elsewhere however, the median value for
units in Sydney is more expensive than the median
value for houses in all other capital cities except
Melbourne.
► Similarly, based on median values, Melbourne units
are more expensive than houses in all other capital
cities except for Sydney and Canberra.
Housing Market Overview
Houses continue to show a premium over units across the country
► It is estimated that over the 12 months to June
2018 there were 459,964 settled dwelling sales
nationwide.
► Compared to sales over the 12 months to June
2017, the number of settled transactions was -8.8%
lower. Annual sales are tracking -16.2% lower than
the recent peak recorded over the twelve months
ending September 2015.
► The combined capital cities recorded an estimated
285,416 settled sales over the year which
accounted for 62% of total sales nationally.
► Capital city transactions were -11.2% lower over
the past year than the previous year while regional
market transactions were unchanged.
► Across the individual capital cities, the annual
change in settled transactions was recorded at: -
14.3% in Sydney, -14.0% in Melbourne, -12.8% in
Brisbane, +1.0% in Adelaide, -0.4% in Perth, -9.6%
in Hobart, -6.9% in Darwin and -11.5% in Canberra.
► Note that these figures are estimates for settled
sales; off-the-plan sales will typically settle upon
completion of the project, at that time these sales
will be counted at their contract date.
► Given this, it is expected that recent years of sales
activity will be revised higher once these
settlements occur.
Settled sales transactions have continued to trend lower

0
10
20
30
40
50
60
70
80
90
Combined capital cities days on market
-9%
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
Combined capital cities vendor discounting
levels
► Vendor discounting measures the difference
between the initial list price and the ultimate selling
price of properties which sell by private treaty for
less than their original list price.
► Vendors that sold their homes below the initial list
price are currently discounting them by 6.0%
compared to discounts of 5.8% a year ago.
► The current level of discounting across the
individual capital cities is recorded at: 6.5% in
Sydney, 4.9% in Melbourne, 5.5% in Brisbane,
5.8% in Adelaide, 8.4% in Perth, 7.2% in Hobart,
10.5% in Darwin and 3.6% in Canberra.
► Brisbane, Adelaide and Canberra were the only
capital cities in which discounting levels are
currently lower than they were a year ago.
Market and Economy
Discounting levels are starting to trend a little higher
► The days on market figure measures the average
time from the first listing date to the contract date
for properties sold by private treaty.
► Combined capital city homes are currently taking
an average of 43 days to sell compared to 40 days
at the same time a year ago.
► At an individual capital city level, the typical days on
market is recorded at 46 days in Sydney, 31 days
in Melbourne, 59 days in Brisbane, 46 days in
Adelaide, 69 days in Perth, 29 days in Hobart, 65
days in Darwin and 46 days in Canberra.
► The typical days on market has reduced over the
past year in Hobart (-20 days) and Darwin (-2 days)
while it is unchanged in Melbourne.
► Sydney (+12 days), Brisbane (+9 days), Adelaide
(+2 days), Perth (+3 days) and Canberra (+3 days)
all recorded an increase in days on market over the
past year.
Properties are starting to take longer to sell

3.5%
3.7%
3.9%
4.1%
4.3%
4.5%
4.7%
4.9%
Gross rental yields, National
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Annual change in national dwelling rents
Market and Economy
► Rental rates increased by 0.3% over the June 2018
quarter and were 1.8% higher over the past year.
► Annual rental growth is the slowest it has been
since March 2017 and lower than the 2.4% growth
recorded a year ago.
► Combined capital city rents increased by 0.3% over
the quarter to be 1.4% higher over the past year.
► Combined regional market rents were 0.4% higher
over the quarter and recorded an increase more
than double that of the capital cities (3.1%) over the
past year.
► Over the quarter, rents fell in Sydney (-0.3%) and
Darwin (-1.0%) and increased in Melbourne
(+0.9%), Brisbane (+0.3%), Adelaide (+0.4%),
Perth (+0.3%), Hobart (+1.9%) and Canberra
(+1.3%).
► Over the past 12 months, rental rates fell in Perth
(-0.2%) and Darwin (-1.7%) and increased in
Sydney (+0.1%), Melbourne (+3.1%), Brisbane
(+1.2%), Adelaide (+2.2%), Hobart (+10.7%) and
Canberra (+4.5%).
Rental growth has continued to slow over recent months
► At the end of June 2018, the gross rental yield
nationally was recorded at 3.7%; 3.4% across the
combined capital cities and 4.9% across the
combined regional markets.
► Houses (3.5%) have lower gross yields than units
(4.2%) nationally as well as across the combined
capital cities (3.2% vs. 4.1%) and combined
regional markets (4.8% vs. 5.2%).
► Across Australia, gross rental yields have softened
over recent years however, they have started to lift
marginally over recent months as values have
fallen.
► Throughout the individual capital cities, gross rental
yields are currently recorded at: 3.2% in Sydney,
3.0% in Melbourne, 4.4% in Brisbane, 4.2% in
Adelaide, 3.9% in Perth, 4.9% in Hobart, 5.7% in
Darwin and 4.6% in Canberra.
► Gross rental yields are currently higher than they
were a year ago in all capital cities except for Perth
and Darwin.
► Although rental growth is slowing in many capital
cities, it is expected to remain stronger than value
changes and as a result yields are expected to
continue to firm over the coming months.
With dwelling values falling and rents continuing to rise, rental yields have started to lift

Value growth is slowing across NSW
• Over the second quarter of 2018, Sydney dwelling
values have fallen by -0.9% and values across
regional NSW have increased by 0.8%.
• Over the past 12 months Sydney values have fallen
by -4.5% while regional NSW values have
increased by 3.2%. By comparison, 12 months ago
Sydney values had increased by 16.4% and
regional NSW values had increased by 11.9%.
• While the Sydney market has been seeing values
decline since July last year, values are still broadly
rising outside of Sydney however, over recent
months many of the regions adjoining Sydney have
also started to experience value declines.
While dwelling values fall for the more expensive
housing stock, lower valued stock continues to rise
• Over the past year, dwelling values for the most
affordable 25% of NSW housing stock has
increased by 4.7% while the middle 50% of housing
stock has fallen -0.9% and the most expensive 25%
has recorded a decline of -6.1%.
• In Sydney, the most affordable 25% of properties
have fallen in value by -1.0% over the past year
compared to a -3.0% fall across the middle 50% of
the market and a much larger -7.3% fall across the
25% of most expensive properties.
• Regional NSW dwelling values have increased
4.7% across the most affordable 25% of properties
over the past year, are 4.5% higher across the
middle 50% of properties and have increased by a
lower 2.2% across the most expensive 25% of
properties.
Settled transaction volumes in NSW are trending
lower
• Over the past three months there was 35,038
house and unit transactions settled in Sydney
which was -9.9% lower than over the same three
month period last year.
• In Sydney, there were 20,601 settlements over the
three months to June 2018 which was -12.1% lower
than the same period in 2017.
• There were 14,437 house and unit sales settled in
regional NSW over the three months to June 2018
which was -6.6% lower than the number over the
second quarter of 2017.
Rental growth is slowing in Sydney and remains
fairly steady in regional NSW
• Over the second quarter of 2018, Sydney rents fell
by -0.3% while they increased by 0.2% over the
period in regional NSW.
• Throughout the past year, Sydney rental growth
has slowed from 3.9% to 0.1% and in regional
NSW annual rental growth was 3.4% a year ago
and has slowed marginally to 2.8% over the past
year.
• Rental rates in Sydney are now -0.4% lower than
they were at their peak while in regional NSW rents
are -0.1% lower than their peak.
With values falling faster than rents, yields are
increasing from historic lows
• Gross rental yields in Sydney were recorded at
3.21% in June 2018, up from 3.05% in June 2017.
• Regional NSW gross rental yields have fallen from
4.61% in June 2017 to 4.50% in June 2018.
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Annual change in dwelling values
Sydney Regional NSW
Market and Economy
New South Wales

Market and Economy
Growth in NSW state final demand has slowed but
remains quite strong
• State final demand measures the total value of
goods and services that are sold in a state to
buyers who wish to either consume them or retain
them in the form of capital assets. It excludes sales
made to buyers who use them as inputs to a
production activity, export sales and sales that lead
to accumulation of inventories. Given it excludes
exports and inventories it isn’t directly comparable
to GDP.
• State final demand in NSW increased by 0.7% over
the March 2018 quarter and although that was the
slowest quarterly growth in a year, it was much
higher than the 0.1% increase in March 2017.
• Over the past 12 months, NSW state final demand
has increased by 3.7% which is the fastest annual
growth since December 2016.
NSW’s labour force is much stronger than most
other states and territories
• The NSW trend unemployment rate was recorded
at 4.8% in June 2018 which is the same as it was a
year ago.
• Over the past 12 months, NSW has created
143,912 jobs.
• Based on the 143,912 jobs created over the past
year, total employment has increased by 3.7% and
45.0% of all jobs created nationally last year were
in NSW.
Population growth in NSW remains strong however,
it has started to slow
• Over the 12 months to December 2017, the
population of NSW increased by 116,823 persons,
the lowest it has been since March 2016.
• Looking at the components, the 116,823 person
population increase was comprised of 43,144 from
natural increase, 92,978 persons from net overseas
migration and there was a loss of 19,299 persons
from net interstate migration.
• Annual natural increase was the highest it has
been since September 2016, net overseas
migration was the lowest it has been September
2016 and the net outflow of residents was the
largest it has been since March 2009.
Approvals for units are trending lower while house
approvals rise
• In May 2018, there were 5,727 dwellings approved
for construction in NSW which was 7.3% higher
over the month and 6.6% higher year-on-year.
• Over the month there were 2,862 houses approved
for construction, an increase of 20.1% over the
month and a 1.0% increase year-on-year.
• Recent data points to an easing in unit approvals
with 2,865 approvals in May 2018 the fewest since
December 2017 however, year-on-year approvals
are 13.0% higher.
New South Wales

A very high number of dwellings were under
construction across NSW at the end of March 2018
• According to the ABS there were 87,266 dwellings
under construction across NSW at the end of
March 2018, which was only slightly lower than the
historic high of 89,162 dwellings over the previous
quarter.
• The 87,266 is split between: 20,041 new houses,
66,054 new units and 1,171 non-new dwellings.
• The number of new houses under construction
increased to its highest volume since September
1989 over the quarter while the number of new
units under construction fell however, it was the
third highest figure on record.
Housing finance commitments in NSW rebound in
May 2018
• The total value of housing finance commitments in
NSW during May 2018 was $14.4 billion which was
19.4% higher over the month but -8.1% lower from
its recent peak.
• The $14.4 billion was split between: $2.7 billion in
owner occupier refinances, $5.9 billion in owner
occupier new lending and $5.8 billion in lending to
investors.
• Although the value of lending rebounded over the
month, all segments of lending across NSW are
trending lower and as a share of total lending
investors have shrunk to their smallest share since
April 2016.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
No of dwellings under construction, NSW
Houses Units
Source: CoreLogic, ABS
$0
$1
$2
$3
$4
$5
$6
$7
$8
$billion
Housing finance commitments, NSW
Owner occupier refinances (3 mth average)
Owner occupier non-refinances (3 mth average)
Investors (3 mth average)
Market and Economy
New South Wales

Dwelling values are increasing at their slowest
annual pace since January 2013
• Melbourne dwelling values fell by -1.4% over the
second quarter of 2018 which was their largest
quarterly fall since February 2012 and regional Vic
values increase by 1.8%.
• Over the 2017-18 financial year, Melbourne
dwelling values increase by 1.0%, their slowest
annual rate of growth since January 2013, while in
regional Vic values increased by 5.0%, their fastest
annual rate of growth since September 2017.
• Although value growth has slowed rapidly over the
past year in Melbourne, regional Vic continues to
see comparatively stronger growth, driven by
housing being much more affordable than it is in
Melbourne.
Values falls are confined to the upper quartile of
the market
• Over the past year, dwelling values for the most
affordable 25% of Vic housing stock has increased
by 4.5% while the middle 50% of housing stock has
increased 5.0% and the most expensive 25% has
recorded a decline of -1.7%.
• In Melbourne, the most affordable 25% of
properties have increased in value by 9.3% over
the past year compared to a 3.3% increase across
the middle 50% of the market and a -2.5% fall
across the 25% of most expensive properties.
• Regional Vic dwelling values have increased 4.5%
across the most affordable 25% of properties over
the past year, are 5.0% higher across the middle
50% of properties and have increased by 5.6%
across the most expensive 25% of properties.
There’s been a significant fall in sales transactions
over the past 12 months
• Over the past three months there was 27,630
house and unit settlements in Vic which was -
11.1% lower than over the same three month
period last year.
• In Melbourne, there were 20,247 transactions
settled over the three months to June 2018 which
was -14.1% lower than the same period in 2017.
• There were 7,383 house and unit settlements in
regional Vic over the three months to June 2018
Rental growth has accelerated in regional Vic while
it has slowed in Melbourne
• Over the second quarter of 2018, Melbourne rents
fell by 0.9% while they increased by 0.7% over the
period in regional Vic.
• Throughout the past year, Melbourne rental growth
has slowed from 4.4% to 3.1% and in regional Vic
annual rental growth was 2.1% a year ago and has
increased to 3.4% over the past year.
• Both Melbourne and regional Vic are seeing rental
rates continue to rise however, there is a clear
slowing of rental growth in Melbourne and an
acceleration in regional Vic.
In Melbourne, gross rental yields are slowly rising
from their historic lows
• Gross rental yields in Melbourne were recorded at
3.00% in June 2018, up from 2.97% a year earlier.
• Regional Vic gross rental yields have fallen from
4.75% in June 2017 to 4.41% in June 2018.
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
Gross rental yields
Melbourne Regional Vic
-5%
0%
5%
10%
15%
Annual change in rents
0
2,000
4,000
6,000
8,000
10,000
12,000
Monthly house and units sales with 3 month average, Vic
Houses Units
-15.0%
-5.0%
5.0%
15.0%
25.0%
35.0%
Annual change in Vic dwelling values across market segments
Low 25% Middle 50% Top 25%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Market and Economy
Victoria

0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Houses and units approved for construction, Vic
Houses (3 mth average) Units (3 mth average)
Source: CoreLogic, ABSSource: CoreLogic, ABS
-40,000
-20,000
0
20,000
40,000
60,000
80,000
100,000
Components of annual population growth, Vic
Natural increase Net overseas migration Net interstate migration
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Vic annual change in employment (trend)
0%
2%
4%
6%
8%
10%
12%
14%
Vic unemployment rate (trend)
Growth in state final demand for Vic over the June
2018 quarter was the strongest in a number of
years
to GDP.
• State final demand in Vic increased by 1.9% over
the March 2018 quarter which was the strongest
quarterly increase since a 2.3% increase in March
2013.
• Over the past 12 months, Vic state final demand
has increased by 4.9% which was the greatest
growth of all states and territories.
The unemployment rate in Vic has fallen
substantially over the past year
• Vic’s trend unemployment rate was recorded at
5.5% in June 2018 which was down from 6.1% a
year earlier.
• Vic has created 64,000 jobs over the 12 months to
June 2018.
• Based on the 64,000 jobs created over the past
year, total employment has increased by 2.0% and
20.0% of all jobs created nationally last year were
in Vic.
Vic remains the nation’s population growth
powerhouse but growth has started to slow
• Vic’s population increased by 143,420 persons over
the 2017 calendar year which was the state’s
smallest increase in population since December
2015 however, it still accounted for 37.0% of the
nation’s population increase
• Looking at the components, the 143,420 person
population increase was comprised of 42,312 from
natural increase, 84,722 persons from net overseas
migration and 16,386 persons from net interstate
migration.
• While natural increase was at an historic high level,
net overseas migration was the lowest it’s been
since September 2016 and net interstate migration
has been falling for three consecutive quarters and
is the lowest it’s been since March 2016.
While unit approvals are well down from their peak,
house approvals are climbing
• In May 2018, there were 6,435 dwellings approved
for construction in Vic which was 11.8% higher over
the month and 18.3% higher year-on-year.
• Over the month there were 3,714 houses approved
for construction, an increase of 9.7% over the
month and a 7.9% increase year-on-year.
• While unit approvals are down from their peak, the
2,721 approvals in May 2018 was 14.8% higher
over the month and 36.4% higher year-on-year.
-3%
-1%
1%
3%
5%
7%
9%
Quarterly and annual change in state final demand - Vic
Market and Economy
Victoria

An historic high number of dwellings are under
construction across Vic
• According to the ABS there were 73,290 dwellings
under construction across Vic at the end of March
2018, which was an historic high.
• The 73,290 is split between: a record high 23,804
new houses, an historic high 48,971 new units and
515 non-new dwellings.
• There was a significant rebound in the number of
dwellings under construction across the state over
the quarter with the number under construction now
7.6% higher than the previous record high.
Housing finance commitments rose across all
segments in May 2018
• The total value of housing finance commitments in
Vic during May 2018 was $10.7 billion which was
26.0% higher over the month and a new record
high.
• The $10.7 billion was split between: $2.3 billion in
owner occupier refinances, $5.0 billion in owner
occupier new lending and $3.5 billion in lending to
investors.
• While all segments of lending have rebounded,
lending to investors as a share of total lending has
trended much lower over recent months.
$0
$1
$2
$3
$4
$5
$6
$billion
Housing finance commitments, Vic
0
10,000
20,000
30,000
40,000
50,000
60,000
No of dwellings under construction, Vic
Houses Units
Market and Economy
Victoria

4.0%
4.2%
4.4%
4.6%
4.8%
5.0%
5.2%
5.4%
5.6%
5.8%
Gross rental yields
Brisbane Regional Qld
-5%
0%
5%
10%
15%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Monthly house and units sales with 3 month average, Qld
Houses Units
-15.0%
-5.0%
5.0%
15.0%
25.0%
35.0%
45.0%
Annual change in Qld dwelling values across market segments
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Slow growth in dwelling values continues across
Qld
• Over the second quarter of 2018, Brisbane dwelling
values increased by 0.3% while across regional Qld
values fell by -0.2%.
• Brisbane dwelling values increased by 1.1% over
the 2017-18 financial year while in regional Qld
values increased by a slower 0.3%.
• Annual value growth in each of Brisbane and
regional Qld has slowed from a year ago and while
values continue to rise it is at a very slow pace.
The most affordable properties in Qld have
recorded values fall over the past year while more
expensive stock is seeing values rise
• Dwelling values across the 25% of most affordable
housing stock in Qld has fallen by -2.0% over the
past year compared to a 0.6% increase across the
middle 50% of housing stock and a 1.7% increase
across the most expensive 25% of housing stock.
• In Brisbane, values have increased by 0.9% over
the past year across both the most affordable and
the most expensive 25% of properties in the city
and they have increased by 1.2% across the middle
50% of the market.
• Regional Qld dwelling values have fallen by -3.1%
the past year, are -0.8% lower across the middle
50% of properties and have increased by 2.2%
Transaction volumes are substantially lower over
the past year
• There were 23,513 dwellings sales across Qld over
the three months to June 2018 which was -14.4%
fewer than the same period in 2017.
• The number of settled sales in Brisbane was -
16.0% lower over the past three months compared
to the same period in 2017 with 11,068 sales
• There were 12,445 house and unit sales in regional
Qld over the three months to June 2018 which was
-12.9% lower than the number over the second
quarter of 2017.
Rental growth has accelerated across the state
over the past year
• In Brisbane, rental rates increased by 0.3% over
the three months to June 2018 while rents
increased by 0.6% over the same period in regional
Qld.
• Rental growth in Brisbane has accelerated over the
past year from a -0.4% annual decline a year ago
to a 1.2% increase over the past year, the largest
annual increase since July 2015.
• In regional Qld, rents have increased by 3.3% over
the past year, their fastest rate of growth since
September 2012.
Rental yields have increased slightly over the past
year
• Gross rental yields in Brisbane have increased from
4.39% in June 2017 to 4.43% currently.
• In regional Qld, gross rental yields are currently
recorded at 5.29%, up from 5.26% a year ago.
Market and Economy
Queensland

0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Houses and units approved for construction, Qld
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Components of annual population growth, Qld
Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS
-4%
-2%
0%
2%
4%
6%
8%
10%
Qld annual change in employment (trend)
0%
2%
4%
6%
8%
10%
12%
Qld unemployment rate (trend)
Growth in state final demand in Qld has slowed
over the past year
to GDP.
• Over the March 2018 quarter, state final demand in
Qld has increased by 0.5% which was down from
1.1% the previous quarter and up from 0.2% the
previous year.
• State final demand increased by 2.9% over the
past year its slowest annual growth since
December 2016.
Qld’s job creation is quite strong but the
unemployment rate remains stubbornly high
• The trend unemployment rate in Qld was reported
at 6.1% in June 2018, slightly higher than the 6.0%
recorded a year earlier.
• Over the past 12 months, Qld has created 62,739
jobs.
• Based on 62,739 jobs created over the past year,
total employment has increased by 2.6% which has
accounted for 19.6% of all jobs created nationally.
Qld has led the nation in net interstate migration
over the past year
• The population of Qld increased by 81,461 persons
over the 12 months to December 2017 with Qld
accounting for 21.0% of the nation’s population
growth over the year.
• The 81,461 person increase in population was split
between: natural increase of 29,602 persons, net
overseas migration of 29,349 persons and net
interstate migration of 22,510 persons.
• Over the year, natural increase was the lowest it’s
been since June 2006, net overseas migration was
the lowest it’s been since June 2016 and net
interstate migration has increased for 12
consecutive quarters and is at its highest level
since September 2007.
Dwelling approvals are falling across Qld
• There were 2,840 dwellings approved for
construction across the state in May 2018 which
was -18.3% fewer over the month and a decline of -
24.6% year-on-year.
• There were 1,971 houses and 869 units approved
for construction over the month.
• House approvals in May were 1.8% higher over the
month but -16.1% lower year-on-year while unit
approvals were -43.6% lower over the month and -
38.7% lower year-on-year.
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Quarterly and annual change in state final demand - Qld
Market and Economy
Queensland

The number of dwellings under construction
increased over the quarter
• At the end of March 2018 there were 33,813
dwellings under construction in Qld which was
2.6% more than at the end of 2017.
• The 33,813 dwellings under construction was split
between: 10,734 new houses, 22,905 new units
and 174 non-new dwellings.
• The number of new houses under construction was
the highest it has been since December 2008 while
the number of units under construction was slightly
higher than the previous quarter.
The value of housing finance commitments showed
a substantial rise over the month
• In May 2018 there was $5.2 billion worth of housing
finance commitments in Qld which was 24.1%
higher over the month but -1.7% lower year-on-
year.
• The $5.2 billion in housing finance commitments
was split between: $1.0 billion for owner occupier
refinances, $2.7 billion for owner occupier new
lending and $1.5 billion to investors.
• Each segment of lending recorded an increase over
the month however, owner occupier new lending
and investor lending was lower than it was a year
earlier.
$0
$1
$1
$2
$2
$3
$3
$4
$billion
Housing finance commitments, Qld
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
No of dwellings under construction, Qld
Houses Units
Market and Economy
Queensland

Values continue to rise albeit at a very slow pace
• Adelaide dwelling values increased by 0.9% over
the June 2018 quarter while in regional SA values
increased by 1.3%.
• Over the past 12 months, Adelaide dwelling values
are 1.1% higher compared to a -0.1% fall in values
across regional SA.
• The annual rate of value change is slower over the
year in Adelaide and higher in regional SA with
changes over the year to June 2017 recorded at
5.4% and -0.5% respectively.
The middle 50% of housing stock across SA has
recorded the strongest value growth over the past
year
• Across SA, dwelling values for the most affordable
25% of properties have increased by 0.3% over the
past year compared to a 1.3% increase across the
middle 50% of housing stock and a 1.1% increase
for the most expensive 25% of housing stock.
• In Adelaide, values have increased by 1.4% over
the past year for the most affordable properties in
the city, they have increased by 1.7% across the
middle 50% of the market and the most expensive
properties have increased in value by 0.8%.
• Regional SA dwelling values have increased by
1.4% across the most affordable 25% of properties
over the past year, are -0.4% lower across the
middle 50% of properties and have fallen by -1.2%
Transaction volumes are marginally lower over the
past year
• There were 9,210 dwellings sales across SA over
the three months to June 2018 which was -0.6%
fewer than the same period in 2017.
• With 6,965 settled sales, the number of sales in
Adelaide was -3.6% lower over the past three
months compared to the same period in 2017.
• There were 2,245 house and unit sales in regional
SA over the three months to June 2018 which was
9.8% higher than the number over the second
quarter of 2017.
Rental growth has accelerated across the state
over the past year however, it has slowed from
recent peaks
• Adelaide rents increased by 0.4% over the June
2018 quarter while in regional SA rental rates rose
by 0.5% over the quarter.
• Over the past 12 months, Adelaide rents increased
by 2.2% and rents in regional SA were 4.6% higher.
• The 2.2% annual increase in Adelaide rents was
higher than the 1.9% a year ago but down from the
recent peak of 3.2% in January 2018 while rental
growth in regional SA has slowed from 7.1% in
April 2018.
Gross rental yields have softened over recent
months in SA
• Over the 12 months to June 2018, gross rental
yields in Adelaide have increased from 4.23% to
4.24%.
• In regional SA, gross rental yields were recorded at
5.92% in June 2017 and 6.12% in June 2018.
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
Gross rental yields
Adelaide Regional SA
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Monthly house and units sales with 3 month average, SA
Houses Units
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Annual change in SA dwelling values across market segments
-10%
-5%
0%
5%
10%
15%
20%
25%
Market and Economy
South Australia

The annual change in state final demand for SA is
much lower than a year ago
to GDP.
• SA state final demand fell by -0.2% over the March
2018 quarter, its weakest result since June 2015.
past year its slowest annual growth since
December 2016.
The trend unemployment rate in SA is starting to
fall
• In May 2018, the trend unemployment rates for SA
was recorded at 5.7% which was the lowest it has
been since October 2012 and down from 6.6% a
year ago.
• There have been 19,411 new jobs created in SA
over the past 12 months.
• The 19,411 increase in employment over the past
year equates to a 2.4% increase in employment
with SA accounting for 6.0% of job creation
nationally over the past year.
The loss of residents from interstate migration is
starting to slow in SA
• SA’s population increased by 10,671 persons over
the 2017 calendar year with SA accounting for
2.8% of the nation’s population increase.
• The 10,671 person increase in population was split
between: natural increase of 4,995 persons, net
overseas migration of 11,747 persons and a loss
from net interstate migration of 6,071 persons.
• Over the year, net overseas migration fell from
12,107 persons the previous year while the loss of
residents from net interstate migration was the
lowest it has been since December 2015.
In SA, dwelling approvals have trended higher
• There were 1,528 dwellings approved for
construction in SA during May which was 57.0%
greater than the previous month and 5.7% higher
than a year ago.
• There were 829 houses and 699 units approved for
construction over the month.
• In May 2018, house approvals were 29.3% higher
over the month and 6.4% higher year-on-year while
unit approvals were 110.5% higher over the month
and 5.0% higher year-on-year.
0
200
400
600
800
1,000
1,200
Houses and units approved for construction, SA
-10,000
-5,000
0
5,000
10,000
15,000
20,000
Components of annual population growth, SA
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
SA annual change in employment (trend)
0%
2%
4%
6%
8%
10%
12%
14%
SA unemployment rate (trend)
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Quarterly and annual change in state final demand - SA
Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS
Market and Economy
South Australia

$0
$200
$400
$600
$800
$1,000
$million
Housing finance commitments, SA
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
No of dwellings under construction, SA
Houses Units
An historic high number of dwellings are currently
under construction across SA
• There were 10,268 dwellings under construction
across SA at the end of the March 2018 quarter
which was an historic high.
• The 10,268 dwellings under construction was split
between: 4,850 new houses, 5,348 new units and
71 non-new dwellings.
• There was a record high number of units under
construction at the end of the quarter while houses
under construction were slightly higher over the
quarter and remain elevated.
There was a rise in the value of housing finance
commitments in May 2018
• In May 2018 there was $1.6 billion worth of housing
finance commitments in SA which was 18.6%
year.
was split between: $366.6 million for owner
occupier refinances, $845.9 million for owner
occupier new lending and $388.0 million to
investors.
• The value of lending to each category rose over the
month while over the year each owner occupier
segment recorded an increase in commitments
while commitments by investors were down almost
20%.
Market and Economy
South Australia

3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
Gross rental yields
Perth Regional WA
-10%
-5%
0%
5%
10%
15%
Perth Regional WA
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Monthly house and units sales with 3 month average, WA
Houses Units
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Annual change in WA dwelling values across market segments
-20%
-10%
0%
10%
20%
30%
40%
Perth Regional WA
Although values are still falling the rate of decline
has slowed over the past year in Perth
• Over the June 2018 quarter, Perth dwelling values
have fallen by -0.7% while in regional WA values
were -0.1% lower.
• Perth dwelling values have fallen by -2.1% over the
past year while in regional WA values have
recorded a larger -3.3% fall.
• Compared to the annual change in dwelling values
over the year to June 2017, the rate of decline has
slowed in Perth this year and in regional WA the
rate of decline has accelerated.
The most expensive properties in WA have seen
the most moderate value declines
• Across WA, dwelling values for the most affordable
25% of properties and the middle 50% of properties
have each fallen by 3.8% over the past year
compared to a -2.1% fall for the most expensive
25% of housing stock.
• In Perth, values have fallen by -4.5% over the past
year for the most affordable properties in the city,
they have fallen by -3.4% across the middle 50% of
the market and the most expensive properties have
fallen in value by -1.9%.
• Regional WA dwelling values have fallen -4.2%
the past year, are -4.1% lower across the middle
50% of properties and have fallen by -4.3% across
the most expensive 25% of properties.
Sales volumes are marginally lower than they were
a year ago
• Over the June 2018 quarter there were 9,561
settled sales across WA which was -0.4% fewer
than the same period in 2017.
• In Perth there were 7,303 settled sales over the
past three months which was -2.0% lower than the
June 2017 quarter.
• Regional WA sales volumes were 4.8% higher over
the past quarter than they were a year ago with
2,258 settled sales over the June 2018 quarter.
Although rents continue to fall, the rate of decline
has slowed
• Over the June 2018 quarter, rental rates have
increased by 0.3% in Perth and they have fallen by
-0.9% in regional WA.
• Perth rental rates have fallen by -0.2% over the
past 12 months and in regional WA rental rates are
-0.9% lower.
• The -0.2% annual decline in rents in Perth is the
strongest annual change in rents since March 2013
while the -0.9% fall in regional WA is an
improvement from the -2.4% annual fall in June
2017.
Yields are softening in Perth while they rise in
regional WA
• Over the 12 months to June 2018, gross rental
yields in Perth have fallen from 3.99% to 3.91%.
• In regional WA, gross rental yields were recorded
at 5.52% in June 2017 and increased to 5.65% in
June 2018.
Market and Economy
Western Australia

0
500
1,000
1,500
2,000
2,500
Houses and units approved for construction, WA
-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
Components of annual population growth, WA
-4%
-2%
0%
2%
4%
6%
8%
WA annual change in employment (trend)
0%
2%
4%
6%
8%
10%
12%
WA unemployment rate (trend)
-15%
-10%
-5%
0%
5%
10%
15%
20%
Quarterly and annual change in state final demand - WA
Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS
State final demand recorded a large fall over the
March 2018 quarter
to GDP.
• WA state final demand fell by -1.1% over the March
2018 quarter, its weakest result since September
2016.
past year which was slower growth than the
previous quarter (+1.5%) but a significant
improvement on the -6.7% fall a year earlier.
The unemployment rate is increasing as job
creation slows in WA
• The trend unemployment rate in WA was recorded
at 6.4% in May 2018 which is the highest it has
been since January 2017.
• Over the past 12 months, an additional 20,368 jobs
were created in WA.
• With a 20,368 increase in employment over the
year, total employment rose by 1.5% which
represented just 6.3% of jobs growth nationally
over the year.
After slowing for a number of year’s population
growth in WA is starting to pick-up
• The population of WA increased by 21,395 persons
over the 12 months to December 2017 which
equated to 5.5% of the national population
increase.
• Breaking down the increase in population, it was
split between: natural increase of 20,004 persons,
net overseas migration of 14,209 persons and a
decline in population from net interstate migration
of 12,818 persons.
• Net overseas migration to WA over the past year
was the strongest it has been since December
2014 while the loss of residents from net interstate
migration was the lowest it’s been since September
2016.
Dwelling approvals have fallen substantially over
recent years
• In May 2018 there were 1,638 dwellings approved
for construction in WA which was 28.0% higher
over the month by -7.5% lower year-on-year.
• Over the month there were 1,206 houses and 432
units approved for construction.
• The number of houses approved in May 2018 was
15.3% higher over the month but -11.4% lower
year-on-year while unit approvals rose 84.6% over
the month and were 5.4% higher year-on-year.
Market and Economy
Western Australia

$0
$500
$1,000
$1,500
$2,000
$2,500
$million
Housing finance commitments, WA
The number of dwellings under construction is
trending lower
dwellings under construction throughout WA which
was lower than both the previous quarter and the
same quarter in 2017.
• The 14,409 dwellings under construction consisted
of: 7,694 new houses, 6,605 new units and 110
non-new dwellings.
• The 7,694 new houses under construction was the
fewest since the March 2017 quarter while the
6,605 units under construction was marginally
lower than the previous quarter.
While housing finance commitments rose in May
they are well below peak levels
• There was $2.6 billion worth of housing finance
commitments in WA in May 2018 which was 17.2%
year.
was split between: $499.2 million for owner
occupier refinances, $1.4 billion for owner occupier
new lending and $646.0 million to investors.
month while over the year each category of lending
was lower with owner occupier refinances and
investor commitments recording much greater falls.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
No of dwellings under construction, WA
Houses Units
Market and Economy
Western Australia

4.5%
4.7%
4.9%
5.1%
5.3%
5.5%
5.7%
5.9%
6.1%
6.3%
Gross rental yields
Hobart Regional Tas
-10%
-5%
0%
5%
10%
15%
Hobart Regional Tas
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Monthly house and units sales with 3 month average, Tas
Houses Units
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Annual change in Tas dwelling values across market segments
-10%
0%
10%
20%
30%
40%
50%
Hobart Regional Tas
While most other states have seen value growth
slow substantially over the past year, growth
remains strong in Tas
• Hobart dwelling values increased by 2.3% over the
June 2018 quarter while in regional Tas values
were 1.7% higher.
• Over the 2017-18 financial year, Hobart dwelling
values have increased by 12.7% while in regional
Tas values were 5.6% higher.
• Over the previous financial year, Hobart dwelling
values increased by a similar rate (12.8%) while in
regional Tas growth is slightly down from the 6.4%
a year ago.
The most expensive properties in Tas have
recorded the greatest value growth over the past
year
• Across Tas, dwelling values for the most affordable
25% of properties have increased 8.5%, the middle
50% of properties have increased by 8.8% and the
most expensive 25% of housing stock has seen
values rise 10.6%.
• In Hobart, values have increase by 14.8% over the
past year for the most affordable properties in the
city, they have increased by 13.0% across the
middle 50% of the market and the most expensive
properties have increased in value 12.2%.
• Regional Tas dwelling values have increased 7.2%
50% of properties and have risen by 4.1% across
Low sales volumes due to low stock for sale is
contributing to value growth in Tas
• There were 2,774 settled dwelling sales across Tas
over the three months to June 2018 which was -
14.4% fewer than the same period in 2017.
• The 1,089 settled sales in Hobart over the June
2018 quarter was -16.7% fewer sales than over the
same period in 2017.
• There were 1,685 settled house and unit sales in
regional Tas over the three months to June 2018
Rental growth is strong across Tas although it has
slowed over the quarter
• Hobart rents increased by 1.9% in the June 2018
quarter while rents were 0.8% higher over the same
period in regional Tas.
• Hobart rents have increased by 10.7% over the
past year which is a greater annual increase than
the 8.2% a year earlier.
• In regional Tas rental rates have increased by 9.6%
over the 2017-18 financial year compared to an
increase of 2.5% over the 2016-17 financial year.
Rental yields are falling in Hobart as values
outpace rents, but lifting elsewhere in the state
• Gross rental yields in Hobart have fallen over the
12 months to June 2018 to 4.94% from 5.14%.
• Outside of Hobart, rental yields have firmed over
the year from 5.69% to 5.74%.
Market and Economy
Tasmania

0
50
100
150
200
250
300
350
400
Houses and units approved for construction, Tas
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
Components of annual population growth, Tas
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Tas annual change in employment (trend)
0%
2%
4%
6%
8%
10%
12%
14%
Tas unemployment rate (trend)
-10%
-5%
0%
5%
10%
15%
20%
Quarterly and annual change in state final demand - Tas
Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS
State final demand for Tas has been steady over
the past year
to GDP.
• State final demand in Tas increased by 2.0% over
the March 2018 quarter, its strongest growth in a
year.
past year which was an equivalent rate of increase
to 12 months earlier.
While it has been strong, Tas jobs growth has
slowed substantially over the past year
• The trend unemployment rate in Tas was recorded
at 6.3% in May 2018 which is the highest it has
been since October 2016.
• Over the past 12 months, an additional 2,893 jobs
were created in Tas.
• With a 2,893 person increase in employment over
the year, total employment rose by 0.5%, its
slowest growth since November 2016 and
representing 0.9% of jobs growth nationally over
the year.
Population growth has accelerated over the past
year in Tas
• Over the year to December 2017, the population of
Tas increased by 4,875 persons which equated to
1.3% of the nation’s population growth.
split between: natural increase of 831 persons, net
overseas migration of 2,161 persons and net
interstate migration of 1,883 persons.
• Net overseas migration to Tas over the past year
was slightly down on the previous year (2,277
persons) while net interstate migration was the
strongest it has been since June 2004.
A housing supply response is slowly starting to
occur across Tas
• Across Tas there were 285 dwellings approved for
construction in May 2018 which was the second-
highest number of monthly approvals over the past
three years.
• The 285 approvals were split between 257 houses
and 28 units.
• The number of houses approved in May 2018 was
34.6% higher over the month and 20.1% higher
year-on-year while unit approvals fell -6.7% over
the month and were -48.1% lower year-on-year.
Market and Economy
Tasmania

trending higher
dwellings under construction throughout Tas which
was the greatest number under construction since
September 2015.
• The 1,973 dwellings under construction consisted
of: 1,503 new houses, 447 new units and 22 non-
new dwellings.
• The 1,503 new houses under construction was the
greatest since the September 2015 quarter while
the 447 units under construction was marginally
lower than the previous quarter.
The value of housing finance commitments
continues to trend higher
• There was $382.3 million worth of housing finance
commitments in Tas in May 2018 which was 12.8%
higher over the month and 7.4% higher year-on-
year.
• The $328.3 million in housing finance commitments
was split between: $75.2 million for owner occupier
refinances, $225.5 million for owner occupier new
lending and $81.6 million to investors.
rose except investor lending.
$0
$50
$100
$150
$200
$250
$million
Housing finance commitments, Tas
0
500
1,000
1,500
2,000
2,500
No of dwellings under construction, Tas
Houses Units
Market and Economy
Tasmania

4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
Gross rental yields
Darwin Regional NT
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Darwin Regional NT
Housing market remains weak in NT however, there
is quite a divergence between Darwin and the rest
of the state
• Over the June 2018 quarter, dwelling values in
Darwin fell by -0.8% while in regional NT they
increased by 4.0%.
• Darwin dwelling values fell by -7.7% over the 12
months to June 2018 while over the previous 12
months values had fallen by a lower -2.6%.
• Over the past year, dwelling values in regional NT
increased by 4.8% which is a significant
improvement on the -7.0% fall in values the
previous year.
Value falls are greatest across the most expensive
housing stock
• Throughout NT the most affordable 25% of
properties have recorded a -3.8% fall in values over
the past year compared to a -4.2% fall across the
middle 50% of suburbs and a -6.2% fall across the
most expensive 25% of suburbs.
• In Darwin, the past year has seen values fall -8.4%
across the most affordable 25% of properties, a
decline of -6.0% across the middle 50% of
properties and a fall of -7.2% across the most
expensive 25% of properties.
• Regional NT dwelling values have increased 5.4%
50% of properties and have risen by 3.3% across
Settled sales volumes have increased marginally
over the past year
• Throughout the June 2018 quarter there were 710
settled dwelling sales across NT which was 4.6%
more sales than over the same quarter in 2017.
• In Darwin there were 571 settled sales over the
quarter which was 8.3% more sales than over the
June 2017 quarter.
• While settled sales rose in Darwin, the 139 sales in
regional NT over the quarter was -8.6% fewer than
the same period a year earlier.
Rental growth is accelerating in regional NT as the
declines in Darwin slow
• Darwin rents fell by -1.0% in the June 2018 quarter
while rents were 0.5% higher over the same period
in regional NT.
• Darwin rents have fallen by -1.7% over the past 12
months with the rate of rental decline slowing from
an annual decline of -4.2% a year earlier.
• Over the past 12 months rents in regional NT have
increased by 3.0% which is slightly higher than the
2.7% annual increase a year ago.
Rental yields are rising in Darwin and are slightly
lower in regional NT
• Darwin’s gross rental yields have increased to
5.74% in June 2018 from 5.44% a year earlier.
• In regional NT gross rental yields currently sit at
6.93% compared to 6.98% a year earlier.
0
50
100
150
200
250
300
350
400
450
500
Monthly house and units sales with 3 month average, NT
Houses Units
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Annual change in NT dwelling values across market segments
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Darwin Regional NT
Market and Economy
Northern Territory

0
50
100
150
200
250
300
350
400
450
Houses and units approved for construction, NT
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
Components of annual population growth, NT
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
NT annual change in employment (trend)
0%
2%
4%
6%
8%
10%
12%
NT unemployment rate (trend)
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Quarterly and annual change in state final demand - NT
Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS
NT state final demand has fallen over the past year
to GDP.
• State final demand in NT fell by -2.0% over the
March 2018 quarter, although the rate of decline
slowed over the quarter.
• State final demand fell by -7.9% over the past year
which was its largest annual fall since December
2015.
The unemployment rate in NT is one of the
countries lowest and it is trending lower
• NT’s trend unemployment rate was recorded at
4.0% in May 2018 which was up from 3.3% a year
ago however it is once again starting to fall.
• Over the past 12 months, an additional 685 jobs
were created in NT.
• With a 685 person increase in employment over the
year, total employment rose by 0.5%, its strongest
growth since June 2017 and representing 0.2% of
jobs growth nationally over the year.
NT’s population is barely growing
• The population of NT increased by 572 persons
over the 2017 calendar which equated to 0.1% of
national population growth and was NT’s smallest
annual increase in population since March 2015.
split between: natural increase of 2,775 persons,
net overseas migration of 1,060 persons and a loss
from net interstate migration of 3,263 persons.
• Net overseas migration to NT over the past year
was the smallest it has been since June 2016 while
the loss of residents from net interstate migration
was the greatest on record.
Dwelling approvals are climbing off a very low base
• 69 dwellings were approved for construction in NT
in May 2018 which was 46.8% over the month and
16.9% higher year-on-year.
• Of the 69 approvals, 66 were for houses which was
65.0% higher over the month and 15.8% higher
year-on-year.
• Few units are being approved for construction with
just 3 in May 2018 which was -57.1% lower than
the previous month but actually 50% higher than a
year previous.
Market and Economy
Northern Territory

trending lower
• There were 967 dwellings under construction
across the NT at the end of March 2018 which was
marginally higher than the 952 under construction
at the end of the previous quarter
• The 967 dwelling under construction consisted of:
252 new houses, 709 new units and 26 non-new
dwellings.
• The 252 new houses under construction was
slightly higher than the previous quarter but lower
than a year ago while the 709 new units was
greater than both the previous quarter and year.
There has been a slight rebound in mortgage
demand
• In May 2018 there was $138.8 million worth of
housing finance commitments which was 24.5%
higher over the month and 2.8% higher year-on-
year.
• The $138.8 million in housing finance commitments
was split between: $22.9 million for owner occupier
refinances, $72.6 million for owner occupier new
lending and $43.3 million to investors.
rose except investor lending.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
No of dwellings under construction, NT
Houses Units
$0
$20
$40
$60
$80
$100
$120
$140
$160
$million
Housing finance commitments, NT
Market and Economy
Northern Territory

-5%
0%
5%
10%
15%
Quarterly and annual change in state final demand - ACT
Source: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABSSource: CoreLogic, ABS
Dwelling value growth has slowed over the past
year in Canberra
• Over the second quarter of 2018 Canberra dwelling
values increased by 0.2%
• Over the 2017-18 financial year, Canberra dwelling
values increased by 2.3% compared to a 7.8%
increase over the previous year.
The most affordable properties have recorded the
slowest annual value growth
• Over the past 12 months, the most affordable 25%
of Canberra properties have increased by 1.6%
compared to a 2.6% increase across the middle
50% of properties and a 2.2% rise in the most
expensive 25% of properties.
Settled sales volumes stable over the past year
• Canberra recorded 2,223 dwelling settlements over
the June 2018 quarter which was one more sale
than over the same period in 2017.
Although rental growth in Canberra is slower than a
year ago it remains quite strong
• Over the June 2018 quarter, Canberra rents
increased by 1.3% which was slightly greater than
the 1.0% increase over the same quarter in 2017.
• Over the past 12 months Canberra rents have
increased by 4.5% which is lower than the 7.1%
annual increase a year earlier.
Rents are rising faster than values pushing yields
higher
• As at June 2018, gross rental yields in Canberra
were recorded at 4.64% compared to 4.52% a year
earlier.
• The 4.64% gross rental yield is the highest yields
have been since September 2014.
State final demand is down over the quarter with
the annual change slowing
to GDP.
• In the ACT, state final demand fell by -0.8% over
the March 2018 quarter which was the largest
quarterly fall since September 2015.
• In March 2018, state final demand was 1.6% higher
than a year earlier which was the slowest year-on-
year growth since June 2016.
4.2%
4.4%
4.6%
4.8%
5.0%
5.2%
Gross rental yields, Canberra
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Annual change in Canberra rents
0
100
200
300
400
500
600
700
800
900
1,000
Monthly house and units sales with 3 month average, ACT
Houses Units
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
Annual change in ACT dwelling values across market segments
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Annual change in Canberra dwelling values
Market and Economy
Australian Capital Territory

2018 08--cl18 quarterly-economic_and_property_review

2018 08--cl18 quarterly-economic_and_property_review

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