The recent drop in house prices is linked to a dip new car sales, especially in the luxury segment, new research shows.
Commsec chief economist Craig James says a key economic indicator for luxury cars is the pricing performance of housing, which has seen July record the largest monthly drop since 2015.
The CoreLogic Home Value Index notes a 0.6% stumble in house prices which Commsec says correlates to the continued slip in sales of luxury and sports cars.
image: Commsec
“When luxury car sales are in retreat you can bet that home prices aren’t far behind,” James tells Business Insider.
“Remarkably, sales of luxury vehicles have tracked movements in home prices over time,” he says.
Since the July 2016 house price peak and January 2017 peak in luxury car sales, according to Commsec data, with input from VFACTS and CoreLogic, the monthly percentage change in home prices and the Luxury Vehicle Index have both dropped from over $106,000 to nearly $96,000.
That’s a decline of roughly 11% since 2016, which mirrored monthly national home prices slowing from November 2016, James says.
“Prices starting to fall (again) in October 2017,” he says, and annual Sydney prices have dropped 5.5% since.
“The slowdown in the luxury car market in 2008 coincided with a peak in the housing market,” he adds in historical reference to the Global Financial Crisis.
July VFACTS figures show Aston Martin is down seven year-to-date sales compared with the same time in 2017, Bentley is down 33 annual sales and sold just 10 cars last month compared to 21 in July 2017, Audi lost 762 July sales versus 2017 (2114 V 1352), Jaguar only managed 173 compared to 210 in July 2017 and is down 253 year-to-date sales (1677 V 1424).
It’s a similar story for Maserati which has only managed 439 against 472 year-to-date sales in 2017; Porsche has sold 2528 cars this year-to-date versus 3077 in 2017, and Rolls-Royce didn’t sell any in July, with only 17 cars sold this year, three less than in 2017.
Supercar brands Ferrari, Lamborghini and McLaren have managed to buck the trend.
Ferrari is ahead with 14 July sales beating July 2017’s 12, and 135 year-to-date sales keeping 22 cars ahead of 2017’s 113 sales.
Lamborghini sits on 13 July 2018 sales, nearly double the seven sold July 2017, and year-to-date sales stand at 78 this year ahead of 71 in 2017.
McLaren has six July 2018 sales versus the zero figure recorded last year, and year-to-date the British marque has some work to do at 53 sales falling behind the 60 of 2017.
