SQM stock on market release

By Leith van Onselen

Following on from yesterday’s post on Melbourne’s record glut of unsold homes, please find below SQM Research’s press release assessing the stock on market as at June 2012.

Figures released this week by property research house SQM Research reveal that the level of residential stock increased during the month of June 2012, rising by 1.7% on a national level and coming to a total of 386,857.

Year-on-year, the nation experienced a 6.4% rise in stock levels, with the most extensive yearly increases occurring in Hobart and Melbourne, rising 29.4% and 27.7% respectively since June 2011.

Darwin, Brisbane and Perth have all recorded yearly falls, with Darwin posting a particularly significant decrease of -26.7% since June 2011.

However overall, stock levels across the country have continued to rise, with the level of residential listings increasing by 6,642 during the month of June 2012. On the back of previous monthly increases, June’s results reveal that we may not have reached the peak in stock levels for this cycle as yet.

Louis Christopher, Managing Director of SQM Research says “The Melbourne result is a real concern as the supply of listings has reached a new high in that city. I fail to see how other data providers can record rising dwelling prices in Melbourne when there is this much stock on the market.”

Key Points

  • Total online residential listings recorded a 1.7% monthly increase during June 2012, coming to a total of 386,857.
  • This figure represents a 6.4% increase when compared to the corresponding period of the previous year (June 2011).
  • Melbourne was the capital city to record the highest monthly increase in sales stock, rising by 6.1% during the month of June 2012 and coming to a total of 55,293.
  • No capital cities recorded monthly declines in stock levels; however Sydney remained unchanged month-on-month.
  • Hobart recorded the largest yearly increase, rising by 29.4% since June 2011 and coming to a total of 4,455.
  • Darwin recorded the most substantial yearly decrease in stock levels, falling by -26.7% since June 2011 and coming to a total of 1,326.

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Unconventional Economist
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  1. A market with prices inching up on low and falling volumes is a Red Dawn warning of heavy rain ahead.

    It is far too early to talk of capitulating bulls – that comes much later. We must endure a prolonged standoff while price discovery is made by forced sellers (job transfer, family breakdown, unemployment) overcoming profound buyer indifference.

    The energies released as this bear market advances will provide a breathtaking spectacle – something to bore your grandchildren with.

    Don’t Buy Now!

    • Property bear markets take a very long time to bottom (typically 3-6) years.

      By the time the Australian property market hits bottom (probably around 2016), there will be no “spectacle” to speak of. Reason being, real inflation (I don’t mean CPI but REAL cost of living) will hide the true extent of nominal losses and anyone who bought before 2007 will still think they’ve made a reasonable return from their property investment (even though the inflation adjusted return will be terrible).

      • Aristophrenia

        Except Melbourne. Its already dropped over 11% and it is about to accelerate massively, the only thing which will prevent a significant acceleration in Victoria’s price plunge will be government intervention – the Kosciusko clause.

        Huge job losses, massive layoffs coming, income deterioration, massive debt, huge over supply, already plunging market and we are well passed watching distressed buyers – we are now seeing the common reality of a declining market becoming well accepted.

        The only question that needs be asked is how much will the impending crash in Victoria affect the rest of the nation, how much will the banks hurt, and what will be the government response ?

        There will absolutely NOT be continuation of the slow melt. No chance.

  2. Does anyone know if these figures can be broken out to show owner/occupiers vs investors?

    I ask because personally I’m betting the 1.1M or however many investors there are declaring average losses of $9k per year wont take it in turns to sell when they figure out they are subsidising renters, especially in Melb.

    • Tax return time (between now and Oct?) should start to see some reassessments of portfolios and some “Aha” moments.
      It going to be an intersting Spring in Melbourne.
      Now I’m getting too scared to enter the market, even though I desire my own home, and have been waiting for what appears an eternity for the return of sanity). I don’t think I’m alone.

      • You definitely aren’t alone. Although I wouldn’t describe myself as “scared” – just “well-informed and prudent”.

      • You definitely aren’t alone in waiting. It has been tough to become an adult/get my first real job starting 2005. It would be nice to get a house before I’m 30, but its unlikely unless it really snowballs fast.

  3. One thing this table tells me is that there is really no such thing as a ‘national’ market. Instead we have regional, city and even within cities suburban and probably even streets that all have their own momentum, some up some down and some flat.
    So depending where you live (and your circumstances),’Dont buy now’ does not apply to the whole continent.
    (And I have nothing to do with property/construction market so I am not talking my book).