Relative to 2020, the preliminary number of residential real estate sales last year were 40.1% higher.
Obtaining full sets of sales data is notoriously slow, so at realestate.com.au we like to look at a timelier measure of sales volumes, which is agent-advised sales of properties that were available on our site.
We call these preliminary sales because they aren’t complete, but they provide a timely indication of transaction activity.
Sales volumes nationally in 2021
Nationally, preliminary data shows property sales in 2021 were 40.1% higher than they were in 2020. In 2020, preliminary sales had increased by 12.3% compared to 2019.
Despite COVID-19 lockdowns still occurring in 2021, the number of sales was significantly higher throughout each month than it was in the year prior.
Looking at the share of total preliminary sales by price point in 2020 compared to 2021 highlights the shift away from lower priced properties to more expensive ones.
Of course, this is a product of both lower interest rates encouraging people to spend more on housing and the subsequent increase in prices reducing the supply of cheaper housing stock.
The share of sales for properties priced below $250,000, from $250,000 to $500,000 and from $500,000 to $750,000 have reduced year-on-year.
At the same time, higher price points have each seen an increase in their share of total sales over the year.
The share of sales for properties priced below $250,000, from $250,000 to $500,000 and from $500,000 to $750,000 have reduced year-on-year.
At the same time, higher price points have each seen an increase in their share of total sales over the year.
With a 40.1% increase in overall preliminary sales between 2020 and 2021, it’s not a shock to see volumes increasing year-on-year among most price points – with sales under $250,000 the obvious exception.
What is much more telling is the fact that sales of properties above $2 million have seen the largest increases.
Each of the $2 million to $2.5 million, $2.5 million to $3 million and $3 million-plus price ranges have seen the number of sales more than double year-on-year.
The $3 million-plus price range, which accounted for 2.2% of all sales over the year, saw the largest increase, up 122.5% year-on-year.
Sales volumes across the capital city and rest of state areas
Every capital city and rest-of-state area recorded an increase in preliminary sales in 2021, relative to 2020.
Regional Northern Territory had relatively few sales in 2021 – just over 500 – but recorded the largest year-on-year increase (75.1%).
Just being was Melbourne, with a 70.5% increase, and regional Western Australia, which was up 46.6%.
Hobart (12.7%) and regional Tasmania (14.7%), along with regional Victoria (21.4%), recorded the smallest year-on-year increases in preliminary sales.
About one-in-five sales in 2021 were in Melbourne, and this occurred despite the fact the city underwent more lengthy lockdowns, whereby sales volumes fell sharply.
Albeit, those falls were not as sharp as during the 2020 lockdowns.
Along with Melbourne, the share of total sales also increased over the year in Brisbane, regional Queensland and regional WA, while there were unchanged or lower elsewhere.
This data highlights the increasing demand for properties in Queensland, which has been powered by a significant lift in migration to the Sunshine State over the past year.
All SA4 regions nationally recorded an increase in sales over the year
Of the 88 statistical area level four (SA4) regions – the largest sub-state areas – across Australia, each recorded a year-on-year increase in preliminary sales between 2020 and 2021.
Of the 10 SA4 regions with the greatest year-on-year increase in sales, eight of them were situated in Melbourne, with the remaining two being regional NT and Ipswich, west of Brisbane.
The list of the 10 SA4 regions with the smallest year-on-year increases in preliminary sales was much more mixed, and eight were regional markets.
Three of the eight were in New South Wales, with two each in Victoria and Tasmania, and one in WA.
What were the drivers of the bumper year for sales?
The combination of record-low borrowing costs, restrictions on people’s movements, the continuation of working from home, and government financial support saw households willing to dedicate more of their income to housing.
In turn, this led to a big increase in sales activity, particularly for higher priced properties, and subsequent growth in dwelling prices.
Outlook for 2022
We expect that price growth will slow in 2022, and given this, it also seems unlikely that sales volumes will lift as dramatically this year as they did in 2021.
Despite an expectation of slowing price growth, there are some good reasons to expect a buoyant year for sales.
Variable interest rates remain at record lows and the rapid increase in prices over the past year means that many homeowners have significant equity.
While forecasting listings is incredibly difficult, the fact that future lockdowns appear unlikely should offer greater confidence for vendors to list their properties for sale.
