Property listings begin to surge

From UBS, the “shortage” appears to be on thin ice:

1Q17 new market listing volumes look to be down -5% yoy After a weak July (volumes -11% yoy) and August (-5% yoy), national new listing volumes appear to have stabilised in September. For the four weeks to 25-Sep-16, national volumes are now only down -0.4% yoy. The flat national result is however being driven by stronger regional markets, as capital city listing growth remains negative. New listings for the capital cities combined were down -14% yoy in July, -7% yoy in August, and -3% yoy for the 4 weeks to 25-Sep-16. Sydney and Melbourne in particular are both still weak: down -18% yoy and -2% yoy respectively at 25-Sep-16. New listing volumes for Brisbane (+6% yoy), Adelaide (-0.1% yoy), and Perth (+16.4%) are however faring well.

Next catalysts: REA 1Q17 and FXJ AGM update both due in early November A -5% yoy decline in new listing volumes should result in a soft 1Q17 for both REA and Domain. However we are beginning to see signs of a recovery in the back end of September. As a reminder CoreLogic data is provided on a rolling four-week basis. Volumes were down -3.9% yoy for the four weeks to 11-Sep-16, but flat (-0.4% yoy) for the four weeks to 25-Sep-16. This suggests national new listing volumes have rebounded to positive growth in the last two weeks of September, which could bode positively for Oct / 2Q17 volumes. Given September is also a seasonally strong month, REA’s 2Q result may also benefit from revenue deferrals from the back end of 1Q.