Melbourne trumps Sydney as nation's busiest housing market: Residex

by Jordan McMullen

Melbourne has overtaken Sydney as Australia's most actively traded residential property market with annual sales to February rising to over 97,000 properties compared with around 83,000 a year ago, according to property research group Residex.

That is a 16.5 per cent rise in property sales for the year to February 2016 - higher when compared to the last two years of growth at 13 and 9.5 per cent.

The Melbourne property market has maintained this high sales growth year-on-year since 2012 with Melbourne and Country Victoria the only housing markets that have maintained a sales growth rate of over ten per cent per annum consistently since the end of 2013.

Sydney, which still boasts the highest median housing and unit values in the country- at over $1 million and $650,000 respectively - had little growth in sales of both houses and units, which totalled 93,653 for the year to February.

In comparison with Melbourne, the turnover of Sydney housing stock has remained flat in the last three years.

Overall, Melbourne has had the strongest growth in sales, followed closely by Brisbane.

But every other capital city, including Sydney, has seen the volume of property sales decline on annual basis.

While Melbourne sales remain strong, housing values have fallen in the major markets, according to Residex.

"Historically, it is common that the February quarter sees subdued growth that is below the long term average, however it is unusual to see a negative result," Residex said in a report.

Nationally, quarterly growth in house values fell 0.04 per cent in the three months to February, while apartment values fell 0.32 per cent.

Median prices in Sydney, Melbourne and Brisbane all fell.

But one market that did not flounder was country Tasmania, which achieved the highest quarterly capital growth rates with median houses values increasing by 2.68 per cent in the February quarter, while units went up by 2 per cent.

Residex also said mortgage and rent repayments are taking up a higher portion of consumer income in Australia, given the large increase in the number of dwellings across Australia, specifically in Melbourne and Sydney.

"All of this serves to slow down spending, which in turn slows down economic activity. For this reason, we may expect Australia's housing markets to finally catch up with Australia's subdued economic position."