SQM Research yesterday released its Stock on Market data for the month of May, which registered a 2.4% increase nationally (to 380,215 units) on the back of a 7.6% rise in Melbourne (to 52,094). The below table summarises the key monthly and annual movements:
According to SQM:
It was previously believed that stock levels may possibly have peaked for this cycle, following recent stabilization and subtle declines in stock on market figures. However, it appears that there has been a change in direction over the past month, with rising stock levels, albeit modest increases, indicating Australia has not yet reached the peak in total residential property listings.
Year-on-year, stock on market has risen slightly, increasing by 3% since May 2011, signifying that by this month of the previous year (May 2011) Australia was already well into recording high levels of sale stock.
Hobart and Melbourne have recorded the highest yearly increases, both rising by approximately 20%, whilst Darwin has exhibited the most substantial yearly decline, falling by over 30% since May 2011.
Managing Director of SQM Research, Louis Christopher says, “Quite clearly the results have been driven by a rapid increase in Melbourne, but we also note the other increases recorded for the majority of the capital cities and so overall, this does raise questions once again on whether stock levels have peaked. And further, at these levels, I can only conclude that house prices are still falling for most capital city locations, as we speak.”
Certainly, the increase in stock in Melbourne is a concern. According to the below SQM chart, the number of homes for sale currently is around twice that recorded at the same time in 2010:
The rise in stock levels in Melbourne is particularly worrying given that housing transfers (home sales) are running near decade lows:
As are the number of housing finance commitments (excluding refinancings):
These three data points suggest ongoing property price falls for Melbourne.
