Stock on market lifts in August

By Leith van Onselen

From SQM Research comes the news that the number of homes listed for sale nationally increased by 1.5% in August to be up 3.0% from a year ago:

From the media release:

Canberra, Sydney and Melbourne all recorded substantial monthly increases – 8.8%, 5.9% and 5.9% respectively. Canberra’s large monthly increase may well signify a downturn for that market as federal budget spending is cut.

Year on year, the increase in stock levels has been slightly more extensive, with a national increase of 3%. Hobart experienced the highest rise in listings of the capital cities with a 24.1% increase. In stark contrast, Darwin has taken a plunge since the same month last year, recording a -23.3% decrease in stock levels since August 2011.

Louis Christopher, managing director of SQM Research says, “Increasingly the market is segmented. It is becoming difficult to discuss just one national housing market and in my opinion, that will be to base line story for the remainder of 2012.”

Key Points

  • Total online residential listings recorded a 1.5% monthly increase during August 2012, coming to a total of 373,510.
  • This figure represents a 3% increase when compared to the corresponding period of the previous year (August 2011).
  • Canberra experienced the largest monthly increase, rising by 8.8% during the month of August 2012 and coming to a total of 3,758.
  • Perth experienced the largest monthly decline, falling by -1.8% during the month of August 2012 and coming to a total of 18,053.
  • Hobart has recorded the largest yearly increase, rising by 24.1% since the corresponding period of the previous year (August 2011).
  • Darwin has recorded the most extensive yearly falls, decreasing by-23.3% since the corresponding period of the previous year (August 2011).
Leith van Onselen

Comments

  1. It would be interesting to see these numbers expressed as number of months of supply, based on how many homes were sold in each market in August, but I’m not sure if total monthly sales (new+est’d) is a number that’s available.

    In the USA, supply went from ~4mos, pre-meltdown, to ~12mos. In the worst hit markets supply peaked upwards of 20mos.

    • Woah. Up 8.8% in a month for Canberra can be partly be explained by the usual increase in listings at this time of year (to coincide with spring).

      But up 13.6% year on year (since August last year) is big. It was Spring a year ago too!

      Hard to argue with the RPM conclusion that Canberra’s increase “may well signify a downturn for that market as federal budget spending is cut.

        • Yeah, obviously August is not spring, but the listings start to appear in August for auctions in Spring.

          (1st weekend in September is the start of the “Spring Selling Season!” Or as we are going to call it this year, the “Spring Spruiking Season!”.

          We had a 48% auction clearance rate on 2 Sept…

  2. There has been some defection in the ranks. Jonathan Chancellor does not buy the bipartisan Fairfax + Murdoch press “spring spruik”.

    http://www.propertyobserver.com.au/weekend-auction-wrap/spring-selling-superlatives-mask-the-shift-away-from-auction

    “Spring auction cheer; Spring property’s pot of gold; Spring tipped to mark rebirth of seller market: Spring into auction; Spring suprise for Sydney vendors; Market’s on a spring roll.”

    Making any celebratory spring forecast after the first day’s results is not something I’ll emulate. Best left to the Fairfax real estate scribes.

    Fairfax’s Stephen Nicholls and Dr Andrew “Baghdad Bob” Wilson might want to respond to that.

    • No worries. They’ve rolled in the big REA shiny suit guns today with an article by John McGrath.

      Helpfully he starts the article with a standard cliche about buying now or being priced our forever. I stopped reading after that.

      • TheRedEconomistMEMBER

        I just tried to add my 10c on the McGrath. I was swiftly rejected

        —————————————————-

        Buyers less cautious, market on the rise

        “And what will the headline be when price rises, once again, fail to materialise.

        Just update the # in the qoute below Mr editor

        “I think the market will turn around to the positive in 201# and people are realising this is potentially the last opportunity to get in at current market prices in Sydney, Brisbane and regional areas.”

  3. In my book, this and mortgage growth (ex-refi) are the two key datapoints to watch. Only moderate growth in stock on market makes me think that a crash is far from imminent. I’m not bullish on property in the medium/long term, but I don’t see it really tanking with the current lack of a strong “push” of stock. My question is how long can retiring boomers stay out of the market in hope of the return of the go-go days? I suspect that many of them have factored in 10% yoy rises as part of their nest egg and the last 2-3 years have blown a big hole in their retirement budgets (say $250k). For the true believers (ie. the majority) it would make sense to hold out for a while, but I suspect there is a lot of pent up supply that will gradually hit if/when that faith is destroyed and they decide to cut their losses. Unlike the potential FHB’s waiting on the sidelines, time is not really on their side.

    • True. So much “unsold” stock has gone to rental in our area, with the hope of selling after some price growth in the near future. Pretty soon they are going to have to sell to get some liguidity happening.

      • Agents are happy to admit they’re advising disgruntled sellers (generally investors) to put their properties back onto the rental list ‘until the market turns’. They better hope that happens sooner rather later otherwise they’ll have pitchforks with their names on them.

  4. Having both a statistics and data warehousing background, this sort of thing intrigues me. I’m currently developing something similar to what SQM does with stock on market, except that it will be a true BI tool with deeper analysis and slice and dice/drill down capabilities. Sort of like the ABS TableBuilder program.

    I’m wondering if there are any smaller property listing sites that cater to particular regions? E.g. like how Realestate and Domain are national but Allhomes is the best site for ACT properties.

  5. We all know property is due for a correction but for some property owners serious wealth loss has already occurred.

    Take the example contained within this article about Harry Kewell’s departure from the blue chip suburb of Brighton,Melbourne.An agent provides an example of a house purchased in 2008 for $4.4 million and selling for $3.98m in 2012 some 4 years later.On the face of it looks like a $420k loss about 10%. But really it is nothing like that, for a start, on the purchase the buyer needed to pay stamp duty of $278,000. The loss increases to $643,000. Add selling costs say $50,000 and we are up to almost $700k loss. Then let’s add the all important forgotten equation of the opportunity cost of living in a trophy house. Let’s assume no mortgage and its funded by cash, during these 4 years I suggest that $4.64m could have earned 6%pa on cash that’s $278kpa total (taxable) return over the 4 years of $1,14m. That’s an all up cost of over $1.8m for living 48 months in a trophy house.If the house was funded by a mortgage even more of a loss. Now I know the rental on such a property would have been significant, but certainly no where near $1.8m and in hindsight I bet the owners would have gone for a lower cost rental than get mixed up in this horror situation.

    http://www.smh.com.au/business/kewells-jewel-snapped-up-20120902-258ds.html

  6. Mr SquiggleMEMBER

    3% increase YoY of on-market stock doesn’t seem that big to me at all.

    Is there anything else to benchmark against, eg total number of homes

    I can’t really think of this as an indicator of anything much, unless the rate of growth in total number of homes is available somewhere.

    Apologies in advance if I’m being dumb/newbie

  7. A boring anecdote from your 7th State across the Tasman. This time last year we knew we would be moving cities – from No 1 to No 5. We started looking for a rental (I’m a doomster!) and when shown one that suited we were told. “It’s for sale at $690k if you’d prefer”. Last Friday the weekend propaganda came through the mail box, and low and behold, there was ‘that’ property with “Sold” plastered across the picture – for $500k…..

  8. Hmm, this shows Darwin has 23% less stock on the market than it did a year ago. This would imply that property’s are selling and the local market is tight.

    Yet this article from APM says that days on the market here has increased dramatically. http://www.macrobusiness.com.au/2012/08/property-time-on-market-rises/

    So there is a fairly large contradiction in the data on property in Australia. As a result of this I would suggest that anyone investing treat all of it as suspect and possibly unreliable.