More dour news from R.P.Data

Just some additional information that was released today by RPData but wasn’t in their media release.

Stock on market looks to be heading back up again:

Across the combined capital cities the current volume of property listings is 36.9% higher than at the same time last year, while new listings are just 2.1% higher than last year. Nationally, total listings over the four weeks to September 25 are 31.8% higher than at the same time last year. While newly advertised listings had been trending lower recently, it appears the Spring selling season has seen an upswing, with new listings up 7.7% compared to the four weeks ending 18 September.

It will be interesting to see SQM research‘s stock on market data for September when it comes out to see if it reports similar results.

Rentals also look to be following a similar trend:

The number of new properties advertised for rent during the four weeks to 25 September is 24.4% higher than at the same time last year nationally and 22.3% higher across the combined capital cities. The total number of rental properties advertised for sale is 14.4% higher than at the same time last year nationally and 14.1% higher across the combined capital cities.

I also noted this chart from Property Observer showing “average days on market for August private treaty sales” for each capital city which could help explain some of this data:

With credit in the doldrums it looks like it is going to be a pretty tough Spring for the Oz housing market.

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Comments

  1. Thanks D.E.

    Interesting numbers, particularly when Real Estate Agents have knocked back potential vendors because they won’t meet the market.

    Potential sellers seem to be opting to rent out the property until the market picks up which, it may, if the Gov. have to stimulate all over again if Europe implodes.

    Cheers

    jasmine

    • endrortsonhousing

      I personally think this data about stock on market might be the most accurate predictor of future house prices.

      Is this a notion I picked up from one of your previous posts? If not, maybe there is a post in comparing stock on market to house prices.

      • I remember previous posts on MB which discuss stock on market as a leading indicator of price movements.

        Sounds like a good subject for a regression analysis…

        • Market theory 101…

          More sellers than buyers? One has to ‘meet the market’ DOWN, as in stimulate those few buyers buy ‘jumping’ the plethora of sellers.

          Take FX, I want to sell Aussie(US) at parity, $100,000 worth. Most liquid market in the world. Any buyers at that price? Nope.

          Current is 0.9728, hit sell, instant pickup….meet the market.

          Mate’s mum in Brisbane in a nice area couldn’t sell her house (WTF!), she’s a Dr. I say to her slash to meet the market, she does, she wants out (BB retiree up at the Sunny Coast). She slashes 20%, sells in 2 weeks. She still has made a packet from her 1987 purchase.

          This is whats coming.

          • Wasn’t in chapel hill was it? I’ve seen the price tank there, the median looks to be down 20 to 30 per cent in the last 4 months alone and I’d guessed it was baby boomers retiring, that had made 400 % and could take the drop. I even gave the example of moving to the sunshine coast to my husband.

          • Close. Its basically taking $400K profit over 20 years waiving the $500K.

            The smarts are getting in early.

            In 2012 it will be $300K versus $400k and on we go.

            THERE ARE ONLY X buyers to meet Y houses where Y FAR exceeds X.

            You better woo those limited number of X’s.

  2. Be careful with the rp data numbers. They have acknowledged themselves that their series is only based on real-estate.com listings. In other words they don’t include domain.com listings. That means they are under reporting the total listings and the results are more susceptible to mere changes in market share between the two major listing sites.

    Still, I agree with the notion that listings may have risen in September. Just watch for seasonality which does effect results this time if year. We will be releasing our results for September next week.

    Cheers all

    • Hi BD,

      Are you seeing a similar rise in properties advertised for rent as well?

      Going by your rental vacancy methodology, rises in advertised rental listings take 2 – 3 weeks to show up in your vacancy rates?

      • This methodology for renting is really misleading – that it has to be empty for 3 weeks. As a renter of 25 years I have never taken a property that has been empty for more than a week. Rental turnover of good property’s realistically priced don’t get noted, they get re-let too quickly. What is noted is the dog boxes that the greedy landlord wants to much for . . . . I’ve never had a problem renting in Sydney, and I usually move (due to overseas stays/work) every couple of years.

        • could be testing the rental sector that is suffering from reduced hours in service industry and or need multi wage to pay for Sydney rents. (eg)

          Could take 3 weeks to find the new market value of rental propeties.

          People with good reliable incomes may be moving up for same money.

          I’m just guessing here…

        • In BD’s defence, I personally think that a metric that is critically concerned and correlated with the subject it is trying to represent is far more important that actually getting the measurement totally accurate – note here I am making a distinction between “accurate” and “precise”, and hence favouring a “precise, well calibrated empirical metric” over accuracy.

          The result would be much the same, in terms of correlated trends, except that we can avoid getting all caught up with unachievable notions of accuracy.

          From what I gather, SQM’s data set and filtering methodologies seem pretty good, and their metric philosophy also seems pretty good.

          Hence, this means that we can take a “vacancy rate of X.Y” to be a fairly precise, but ultimately arbitrary, well-calibrated and well-correlated indication of what might be considered to be the “real” vacancy rate.

          Consequently, further “improvements” in the quality of the data set and methodology will only really be very incremental, to the point of being diminishing and questionably worthwhile.

          It’s part of the reason that I know my BurbWatch data sets are not the best, but I am confident that they will still allow me to produce indicative, reality-correlated trends, which are ultimately fairly reliable, though not perfect.

          My 2c

        • It’s actually three weeks from when the property is first advertised. Not from when it’s first unoccupied. We have based this on the grounds that most properties are advertised first before the existing tenant leaves. If we were to just base the vacancy rate on all rental listings then all we would be capturing is turnover of rental properties..not vacancies.

          It’s just our view based on what happens most of the time on the ground. I assure you we have no ulterior motives in representing one picture or the other.

    • Assuming Black Dragon is Louis Christopher… isn’t it best to proclaim your competitive interest here? I thought RP Data’s blog on listings (http://blog.rpdata.com/2011/08/how-many-homes-are-available-for-sale-around-australia/) was pretty informative – and clearly states their listings data is sourced from more than just realestate.com.au (they key all the classified ads as well). I can only assume SQM simply scrape listings from all the major portals. Black Dragon, can you comment on how you manage to deduplicate your listings data from all these varied sources where the the listing address and other fields are often non standardised and you dont know when a listing has actually been sold? It would be great if you could provide some transparency about your methodologies on your web site.

      • I think your link says it all.

        Here is the quote from your link:

        “We collect the listings data via a formal arrangement with Australia’s largest property portal, realestate.com.au as well as by keying the classified ads from each of the major newspapers around the country.”

        That suggests to me that RP Data DONT have any arrangement with Fairfax nor monitor domain.com.au. I would be happy to be stood corrected by them.

        From our research, I can tell you now that domain.com.au dominant certain major metropolitan regions and smaller localities around the country. In other words, you will find the listing on domain.com.au but not on realestate.com.au. And of course, vice versa. That’s why it’s important to monitor BOTH the sites.

        You have also suggested they monitor “ALL” classified ads? Well, no. They don’t. Once again the quote is:

        “…from each of the major newspapers around the country.”

        That, to me suggests they are leaving out the local newspapers such as the North Shore Times etc?

        In any case, most people in the industry know that the major metropolitan newspapers have been losing out market share on online real estate listings for a long time now. The cross over actually happened back in 2005.

        Yes, de-duping can be difficult. Fortunately I and those close to me have over eleven years experience in doing it. And no, I have no inclination to give away the full recipe to you or any of my other competitors. Needless to say we spend much ongoing time in ensuring the supes stay out.

        You will find our methodology on our site. Agreed, I could add a little more to it without giving the game away too much, so will do shortly

  3. splitting this data into units and houses might also be interesting. My own scrapped data suggests a rather large disparity between units and houses in the Inner West of Sydney at the moment, with unit listings up about 18% over the last 2 months, whilst House listings are down about 6% in the same period.

    Further, it appears that unit prices are down 6% from their peak but house prices are flat.

    My theory is that investors generally prefer units because the outlay is smaller and the yield is higher, so this represents investors leaving the market. as opposed to upgraders who are starting to delay their move

  4. Not to mention that there does appear to be a cyclic-tension between the sales and rental listings, via the sale-rent listings ratio. See http://www.burbwatch.com.au, chart 6 of any of the state or national listings.

    The ratio is now “supposed” (assumes cyclic trend to continue) to trend up now for most states and nationally, with the sales AND rental listings both going up together one of the possible (and worst) scenarios. Only, according to the projected sale-rent listings ratio cycle, expect the relative change in the sale listings to outstrip the rental listings for the time being (until the cycle “tops” within a few months time).

    I could write on this stuff all day……

    And i should hurry up and update the site, yes….sorry…

    • looks like hidden oversupply is coming on the market

      just noticed recently that many empty ruined houses, vacant for decades, in inner eastern suburbs of Sydney are being renovated and put on sale

      • Mate, honestly, I’m struggling.

        I have so little time to do what I already have on my plate; I’ve been vvveerryyy slowly automating what I’ve got (and adding HEAPS more data) but it has taken forever….

        I’ll keep working on the mortgagee program, but I won’t make any promises at this point – I just don’t have the time.

        Stewart

  5. In last year alone oversupply of homes in Australia increased by around 50k. It may be surprise by some but stock on market will not go down even if government starts giving away 50k FHBG. There are numerous homes that nobody needs.

    Supply: 165k new homes were built (145k after demolition adjustments), around 55k was left vacant after residents’ deaths

    Demand: 160k migrants came and created demand for around 60k homes, while internal household creation created demand for about 90k more homes

  6. I don’t know if it really means much, but inner nth Melb 3056? 1Cnr + 2 houses adjoyning after being let ( I’ll take a punt at 20 + yrs) up for sale as one job lot, is a sign players are cashing in their chips. No plans or approvals just buy , develop & reap the rewards.
    It will get nasty. Had a guy up the street from me who bought in 2005/6 for 450. Sold in 08 for 970. Good luck to him, but the buyers have 2 kids & a Conformadore. I don’t know how it all works.

  7. Strange thing about Sydney is that it is supposed to be surrounded by a defaulting ring of fire (MSM description, not mine) and a molten core (prestige suburbs crashing), yet the median price is holding up.
    .
    Something does not smell right..

    • Medians fall very slowly. Often there will be great bargains around, but the median will not reflect that because there are sufficient transactions at non bargain prices to hold it up.

      Only desperate sellers will slash prices, those who don’t have to sell won’t.

      • Price Distributions are better, are they not.

        It’s silly that BurbWatch is the only “data provider” (lol!) that shows price distributions – and I can only provide Vendor Price distributions…..at least that is something…

      • If the only transactions are set by desperate sellers then thst sets the new median. So peter is talking just furphy. Prices are set at the margins

        • IMHO, PF is not talking a furphy; I agree with your assertion that price are set at the margins, but I don’t think it’s entirely mutually exclusive with what he’s saying.

          They are set are the margin – and this will happen slowly, generally; but it is also true that, especially in a bear market (even worse if it is a bubble popping!) that the desperate (the lower margin dwellers) will set the price.

          Stewart

    • I agree Mav.

      I was once pointed to the NSW Govt House Price and Rent issues that paints a different picture to what we are being told.

      The problem with the data is that it is only updated every three months and the latest issue only has data for sales to the March qtr and rents for the June qtr.

      http://www.housing.nsw.gov.au/NR/rdonlyres/7B8407E4-8BF2-4F74-ADEC-FB7EA81296A6/0/RSReport96.pdf

      It is worth noting however that median prices according the govt actually fell 7.2% in the March qtr. Looking forward to the next issue.

      • The median price is useless. Get one high sale and the RE spruikers claim its increased 25% for the whole suburb. Unfortunately the few people who are still buying at inflated prices allow this to happen.

        If people are silly enough to believe this then I have little sympathy.

  8. NOT A ''TRUE BELIEVER"

    Anybody who still believes the RP Data spin or that Australia will end up with the most expensive real estate in the world, will probably also believe there are fairies at the bottom of the garden and Kevin Rudd is not angling to return as PM.
    Ah buddy, wanna buy the Harbor Bridge ?

  9. More fantastic news from R.P.Data. Nothing dour about falling house prices and rising inventory. Sounds bloody wonderful.