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Sunday, 7 October 2018

New car sales slowing in Sydney (good!)

New car sales slowing

Over the years I've dutifully reported the monthly new motor vehicle sales figures here, including the super-boom in New South Wales, where last year new motor sales were tracking at a rolling annual total of about 400,000 (up from about 300,000 a decade earlier).

That couldn't last...and nor should it.

The car yards are now reporting slower sales in New South Wales, widely - and I think correctly - assumed to be related to the cooling housing market.

That's one likely cause.

Another is that almost anyone and everyone in New South Wales who could've wanted a new car has already bought one.

The number of vehicles on the NSW register exploded by another 400,000 over the 5 years to the 2018 motor vehicle Census to 4.28 million. 

Gas-guzzling US aside, very few countries have more vehicles per 1,000 of population than New Zealand and Australia.

The Australian 2018 Motor Vehicle Census reported 776 motor vehicles per 1,000 persons, compared to an equivalent figure of 469 in the United Kingdom, for example.

Yes, we're a highly urbanised country.

But with public transport usage now on the rise as Sydney and Melbourne mature as capital cities the ratio should ideally be declining. 

And yet throughout the period from 2013 to 2018 the ratio in New South Wales increased from 680 per 1,000 population to 712 on the back of lower mortgage rates and increasing equity. 

NSW economy in tidy nick...for now

Of all the states, Victoria may well now be assuming pole position as the centre of economic strength, but New South Wales isn't far behind. 

Retail turnover growth across the two most populous states is still tracking at about 5 per cent, albeit in part thanks to a low base effect, including plenty of discretionary spend. 

Over the year to August 2018 New South Wales added a stunning 151,000 to its total number of employed on a net basis, pushing Greater Sydney's unemployment rate down to around decade lows at under 4½ per cent. 

New car sales must slow as Sydney's population approaches 5.3 million and public transport becomes more vital to commuters.

This may not be a bad thing, at least to a point. 

In terms of housing market activity - perhaps that should be inactivity - Cooley's reported that some 36 per cent of its booked auctions were withdrawn on Saturday, leaving only just over a third of their planned auctions selling under the hammer.

With the usual spring surge in total listings failing to materialise it looks very much as though Sydney's housing market is going into hibernation until 2019.