For the first time in many years, annual sales climbed in every market area and for both houses and units according to Residex.
Over the 12 months ending January 2010, house sales in Perth jumped by 36.77% while unit sales soared 62.31%. While this is coming from a relatively low base, it does show a strengthening market.
Sydney recorded 45,875 house sales - 22.79% higher compared to the previous year. Strong demand for units resulted in 47,652 sales or 31.37% increase over the past 12 months. Melbourne recorded the highest number of total house sales at 56,426 or 30.68% increase year-on-year while unit sales rose by 27.46% or a total of 35,171 sales.
Across Australia, a total of 354,005 houses changed hands while 147,301 units were sold.
"The driving force behind this is overseas migration and both the rate and actual numbers of overseas migrant arrivals increased last year, coupled with a baby boom that is providing a natural increase rate of 0.74%," explained John Edwards, CEO of Residex. "Back in 2005/06 the number of overseas arrivals overtook the natural population increase, and this ratio has continued upwards so that the rate of overseas migration is now nearly double that of natural increase, with over 285,000 arrivals last year."
These people require immediate accommodation and in this respect are unlike natural population growth where households initially absorb most of the new arrivals in existing housing. As young Australians leave home each year they form 60,000 new households and join the 110,000 households created annually by overseas migration to generate demand for around 170,000 new dwellings. This is far in excess of the 140,000 new dwellings approved or commenced each year and generates unmet demand for 30,000 houses or units which increases pressure on both prices and rents."
Edwards also noted that median growth for both the house and unit markets are now very close to the ten year annual average. "Our housing market is performing in accordance with its historical growth average, something that has not happened for a long time. Of course, within this median figure are hidden rises in some markets and falls in others," he said.
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