The house always wins: why house sales vastly outstripped unit sales over the year

In the year to January, CoreLogic estimates that there were 459,308 properties transacted across Australia. Most of these sales were houses, rather than units.

It is not unusual for house sales to make up the majority of transactions, with houses making up an average 70.2% of annual sales volumes over the past decade. However, the share of houses as a portion of sales increased to 74.2% in the year to January 2021, up from 66.7% five years ago. Another way of thinking about it, is that for every 1 unit sold over the year, there were 2.9 house sales.

The introduction of HomeBuilder may have skewed demand toward houses. Since the announcement of HomeBuilder in June, new home sales have increased significantly. According to the HIA, new home sales in the December 2020 quarter were almost 100% higher than in December 2019.

Investor lending was low, and investors may prefer units. The value of finance commitments for the purchase of investment property, as reported by the ABS, has a stronger positive correlation with unit sales than houses. Comparing a decade of sales volumes with investor finance commitment values produced a correlation coefficient of 0.74 with units, and 0.48 with houses.

Source: The house always wins: why house sales vastly outstripped unit sales over the year (corelogic.com.au)