Property buyer demand remains red hot

The latest REA Insights report shows that property buyer demand is surging, which is fueling the rapid price appreciation being experienced across Australia.

First, REA’s weekly demand index, which “measures the change in the number of people that are highly-engaged with properties listed for sale on realestate.com.au”, is running near historic high levels, up 58.6% relative to the same time a year ago:

REA weekly demand index

REA’s weekly demand index is running way above the same time last year.

Second, weekly ‘for sale’ searches are way above the same time last year across every market:

REA weekly for sale searches

Weekly for sale searches are up massively on the same time last year.

Third, the average view per ‘for sale’ listing on realestate.com.au is running way above the prior three years:

REA average views per for sale listing

Average views per ‘for sale’ listing are running at three-year highs.

Finally, actual sold properties on realestate.com.au in 2021 is running well above the prior two years:

REA weekly sold properties

Sold properties on realestate.com.au are running way above the prior two years.

CoreLogic’s data shows similar strong demand amid constrained supply.

In particular, CoreLogic estimates sales volumes increased 12.6% nationally in the year to February, with sales tracking way above the five-year average:

CoreLogic sales volumes

Property sales volumes are booming, according to CoreLogic.

At the same time, total listings are running at historical low levels, down around 28% from the 2016 to 2020 average:

CoreLogic listings

Property listings are running 27.5% below the five-year average, according to CoreLogic.

The insatiable demand is also reflected in record new mortgage demand and strong auction clearance rates. When combined with the limited stock on market, the inevitable outcome is turbo-charged price appreciation.

Unconventional Economist
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Comments

  1. pfh007.comMEMBER

    Fantastic energy in the market.

    Just imagine how much energy there would be if the RBA actually targeted house price growth.

    It is amazing what accidents can achieve!

    In other good news the AUD is below 50 cents and local production is coming back! So blowing up the housing market with QE, ZIRP and TFF has been very worthwhile.

    If the RBA is going to drive money creation by banks it is safer if it mostly goes to those who will do something sensible with it like speculate on solid as rock housing assets. Those are the “credit worthy” folk.

    And applauded by clapping seals all the way.

      • pfh007.comMEMBER

        Nah. The RBA are allowing those who want to a go to have a red hot go.

        Sure it requires them to be very very long residential property but they are not making more of it so why not!

        It is a good news story!

  2. David Jonstone

    I would say that without a doubt this is because there are so many people desperate to sell. Take a look at almost any suburb in Victoria on SQM research and stock is going ballistic – so people are looking to find out what their property is worth in order to sell.

    Not buy.

    Some, sorry MANY, suburbs are in serious trouble with highest volumes on record.

    Not sure what you are selling – but its 100% not true for Melbourne and Victoria.

    • What areas?

      Everything I see is decent volumes but not huge and huge prices

      Northern Rivers

    • Part of me wants to believe you, but everything I see in terms of weekly auction results seems to indicate otherwise. At least for houses. I agree units, townhouses and apartments will be in trouble, but not detached dwellings in nice suburbs.

      • I’ve seen some semi-detached and terrace (ie not detached at all) houses in quality Melbourne suburbs go for amazing amounts also.

    • ChristopherMEMBER

      I am calling BS on this one, my parents place sold in 7 days after going on the market in South West Melbourne to a fully unconditional offer. Nice house, on a six lane road and priced well above suburb median.

      Agent told me that family grade houses are selling faster than they can keep supply up.

  3. REA’s on Lake Macquarie are so busy they dont even return calls.

    Either that or they are busy attending The #MARCH4JUSTICEAU rally.

    Apparently, this magic market doesn’t even need stock to levitate.

  4. These people have no idea the misery of a life they are buying into
    Years of negative equity
    Years of very high interest rates
    Years of high property land taxes
    Years of rising council rates
    No holidays

    They will be a prisoner of debt in their home

      • I tell you it’ll be misery
        My GF wants to buy a home in the crash 22/23, but even if it’s 60% cheaper I don’t think I want to own ever
        I’ve lived in a period of high inflation high unemployment and high interest rates, it’s just misery and honestly guys you have no idea it’s years of prices going nowhere and drifting down and all your stress is worrying about repayments, then the council raises rates, if body Corp fees go much higher. owner occ land tax will go up
        Property owners are the ones who will be paying off the government debt … property is a fixed asset, you can’t move it to another country like crypto, equities etc
        If you are on here and under 40/45 yes old, you won’t understand, your parents wiii

        Property price increases aren’t linear or a function of time.
        They have been rising because of really easy credit and falling interest rates to 1.99% plus MBs
        Favourable taxes
        Immigration

        The list goes on

        All above will be gone and reverse

        Really we aren’t much higher than 2016/17 highs in general and interest rates are much lower 5/6% to 2%

        The last surge of euphoria is into mid year .. you’ll never see these prices again for 10 or 20 years if ever in your lifetime

        That’s a guarantee, so if you are feeling rich from this years bubble enjoy it because you won’t be next year….

        • Harry’s stealing your thunder!
          https://www.skynews.com.au/details/_6244898701001

          “Real estate, stocks, everything but the most conservative government, Australian and US Treasury Bonds, are going to go down to reality and it’s going to hurt more than anybody thinks it ever could”. “And nobody thinks it could happen and I’m the only guy on earth saying it,” Mr Dent told Sky News host Chris Smith. “Once you get bubbles of this extent, there’s no way to stop it, they have to come down to reality”. “I’m telling you, it’s 30 to 50 per cent for real estate in most countries and it’s 60 to 90 per cent in stocks in most countries. “This is going to kill most people’s retirement portfolios. “And there’s nothing they can do about it … I’m telling you it’s coming in the next two-to-three-years. “And I think it’s about to start in the next month or two.”

          • I remember clearly Harry Dent making such calls 6+ years ago. Didn’t happen. It’s just click bait. Chicken little indeed.

          • Charles Solomon

            I do not think that HD did get any prediction ever right let a lone the timing. He is claiming that since a decade at least.

          • It’s not chicken little, it’s fact.
            Where harry went wrong he didn’t accept the never ending stimulus and QE.
            Which has only delayed the outcome and has also made it a lot worse.
            The housing crash was always going to be in 2 stages.
            Non commodity countries in 2008 and commodity countries this time.
            It’s going to be this year in second half. It’s going to be the day of reckoning we can’t escape
            Anyway it’s not an 18 months wait, it’s 3rd Qtr this year into 4th Qtr
            Most of the major falls will be before Xmas this year with some carry over into 1st Qtr next year 2022

            Australia will suffer probably the worst out of any country. Our excesses are off the scale.

            Anyway it actually doesn’t matter anymore for anyone with a mortgage, the problem is so big, noone will be paying off their debt.

            Anyway you’ll see in H2……..

            I NEED ABOUT 2 WEEKS TO CONFIRM SOMETHING I AM EXPECTING TO HAPPEN THAT WILL SET IN STONE MY FORECAST
            I WILL TELL YOU ALL IF WE SEE
            JUST NEED A FEW WEEKS.

            I WILL WRITE ABOUT IN ON HERE AND GIVE GRAPHICAL EXAMPLES OF WHY I WILL BE RIGHT

            GIVE ME A COUPLE OF WEEKS AND YOU WILL UNDERSTAND

            I BELIEVE YOU WILL ALL THEN AGREE WITH ME……

        • Charles Solomon

          BC, while there may be a crash at some time, I do not agree with your timing. It may be a decade or two out before something happens if ever. Politicians in Oz and everywhere else have proven to be very innovative to keep the status quo going for as long as they want. Keep in mind their job is depending on it and if you look at the unnatural market distortions some EU countries did in the recent months (look at Germany that paused insolvencies, no kidding), there is a long way to go.

          • yes I understand that everyone has a view……you will see and understand……it’s months away…..so we won’t have to wait long

        • What exactly does this mean >> Anyway it actually doesn’t matter anymore for anyone with a mortgage, the problem is so big, noone will be paying off their debt.
          Debt jubilee!! Except who’s wearing the other side of the loss and what happens to the collateral (house)?
          There’s really a lot unexplained.

          • Divya
            I’m telling you that hardly any of these trillions in HH mortgage debt will ever be repaid, banks will be lucky if they get the interest paid
            I have no idea what they’ll do
            You are going to see over the next 12 months

            I believe the only sensible solution is Steve Keen QE to the people
            Debt directly to bank accounts
            If you have debt, that must be paid off first

            They are such imbeciles, who knows the solution

            I’m not going to write again about banks being shut while they come up with some scheme to fix the mess

            We will see in due course

            This will be all underway before Xmas

            I’d say most of the crisis and collapse will be before Xmas this year or at absolute worst Q1 next year

      • happy valleyMEMBER

        Ah, and mortgagors (borrowers) are the walking dead and mortgagees (banks) are the grim reapers/angels of death? And Josh the Pawnbroker and the rest of the LNP, the RBA angels of death, angel of death sheltered workshop APRA and the private bankster angels of death want heaps more walking dead?

  5. It’s all these people with excess savings from doing nothing last year who can think of nothing better than leveraging it all into higher house prices. No one likes a household with a lazy balance sheet.

  6. If I’m wrong 22/23

    I’ll get a t shirt and cap made

    Saying I’m Reusa & Phil Lowe’s Bich

    I’ll stand on the stairs of the RBA in Martin Place and MB can post a photo or even a video on here

    I’ll bow to Reusa …..

    • happy valleyMEMBER

      “Saying I’m Reusa & Phil Lowe’s Bich”

      No need to go that low.

      But while you are on the Ivory Tower steps, maybe go and crash a monthly RBA board meeting when they’re just about to crack open the Cristal champagne and celebrate how much their OO and IP portfolios have gone up in value since their last meeting and how many fixed income reliant retirees they’ve consigned to the scrapheap of life during the month?

    • Consider that, Reus will take you up on that. He’s known to spray his ownership over his conquests, and victories. And the pleasure is always, all his.

    • SnappedUpSavvyMEMBER

      just a short congested trip to vib rant merrylands if you need a mos que or temple

      having that frontage i would imagine some gucci purse posing Bro’s would have snapped it up for a dodgey duplex Bro

  7. It’s all subjective, but I wouldn’t live at Castle Hill if you paid me $2M. To think that someone would voluntarily enslave themselves for the majority of their lives to live in that sheethole is something I find truly bewildering. Each to their own I guess….

    It’s mind blowing when people tell you they’ve taken out a ridiculously outsized mortgage because of the property’s metro postcode based on the reasoning that wages are higher in the cities.

    • “To think that someone would voluntarily enslave themselves…”

      Who’s enslaving themselves? If the new owners bought any kind of decent sized property 10 years ago, they could be trading up with >50% equity, then borrowing the rest (maybe a principal that’s 4-5 times household income) at record low interest rates.

      And now they’ve got a 5 bedrooms and butlers f*cking pantry. I bet you they’re actually feeling pretty good.

      • FUDINTHENUDMEMBER

        True. Also I imagine many folks buying now are not planning to live in the house for the rest of their lives. The plan is to get in, make some massive profits, and sell in a few years!

        I honestly don’t think there’s a lot of folks who are sitting down and running the budget on how they are gonna pay off the 2 million dollar principle plus interest on some of these places.

        • I don’t think so either. In fact lots of people seem to be buying houses they never plan to pay off, just cash out of at some point. Fools if you ask me. Me, I’m good to get mine paid off.

      • Brett 10 years ago is very different, we are talking maybe 15/16 or onwards
        Anyone who bought 10 or 20 years ago and just paid off their debt in a safe position is rare
        Most borrowed for another property
        Anyone in a sound position, good job good Industry, good area home is fine but that’s very rare
        Retirees with no income 0% in the bank will struggle with OO land tax
        So for someone you are taking about is in a great position
        What’s coming is a DEBT CRISIS
        Low and manageable debt is all good

  8. This is basically FHB with a really bad case of FOMO and a bunch of investors breathing a sigh of relief that they are getting another good chance to sell at the top. The other potential sellers that are waiting are the ones that bought at the 2017 peak and now have a bit more confidence in holding and hoping prices keep rising of the next few years. The other potential buyers that are waiting figure this is another frothy top that wont last. This is the usual dynamics that occur as you retest the top again

  9. Can we get some understanding of the charts?
    We have 140k listings on 28 day rolling count chart but only sell 50k a month? Am I seeing this right?
    Can I ask how you get listing at 28% down and volume of sales up 12%?
    Nationally we have 50,000 less places for sale than average but 10,000 more transactions than average?

  10. Moments like these you need a Minsky

    For any commodity fetishism to turn red hot, be it Property or Matchsticks, you need an ideological army of socio-psychological “freedom marketeers” to create the desire. Eventually things catch alight.

    In the 80’s the worst brand of matchsticks Swan Vesta, used dapper looking gentlemen (Reusa types) and Freudian “trains and tunnels” to convince some that relations were a shake of a matchbox away.

    The safety match was invented, out of necessity.