All eastern states started the financial year 2022 strong in terms of sale volumes and values but lost momentum over the second half of the year as interest rate hikes started to put pressure on demand.
PEXA’s latest Property Insight report showed that an overall growth across New South Wales, Queensland, and Victoria in terms of sales settlements and value in FY22.
Queensland reported the most significant gain in terms of volume, with sale settlements growing from 197,317 in FY21 to 220,692 in FY22, reflecting an 11.8% increase.
Victoria posted the second highest increase at 8.6% from 185,445 to 201,361. Meanwhile, New South Wales’ sale settlements inched 1.5% up from 203,083 to 206,052.
New South Wales outperformed the two states in terms of the overall sale settlements value after it recorded a 28.8% growth from $185.2bn to $238.5bn.
However, Queensland still posted the highest gain in settlement value at 36.1%, from $109bn to $148.3bn.
Victoria also clocked a robust gain, with its settlement value rising by 35.2% from $123.6bn to $167.1bn.
PEXA head of research Mike Gill said the FY22 started strong compared to the previous financial year.
“This strong result was driven by an exceptional first half of the year, with a noticeable drop off across all states in the second half,” he said.
For instance, while New South Wales recorded overall growth of 1.5% year-on-year for residential sale settlements, the second half of the year was down 17.8% on the first half.
Mr Gill said this trend was also observed in Queensland and Victoria, as the market peaked in late 2021 and the impact of rising interest rates weighed on the market. Over the second half of FY22, Queensland and Victoria posted declines of 12.8% and 5.9%.
“As the market moved to a more ‘normal’ setting, after a period of significant growth, settlement volumes trended downwards although remained at historically high levels overall throughout FY22,” he said.
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Photo by @jamie_davies on Unsplash.
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