One of the reasons why Australian property values are surging is due to the dearth of stock on the market.
Demand is ferocious, as illustrated by the surge in mortgage commitments to record high levels. House sales are also running way above the decade average at around the 2015 peak, according to CoreLogic:
House sales are running near the 2015 peak.
At the same time, actual property listings collapsed, running at record low levels according to CoreLogic’s February market update:
Property listing are down around one-third from ‘normal’ levels.
This imbalance in demand and supply is obviously helping to drive property prices higher as the hungry pool of buyers competes for scarce stock. In turn, buyers are experiencing a sense of FOMO, throwing down big sums of money to ensure they secure a home.
According to new data from Domain, property listings have begun to pick-up “with some agents booked out for auctions into July as a flood of new listings is about to hit the market”.
As shown in the next table, big rises in new listings were recorded across every capital city between 14 February and 14 March:
Includes new listings from 14 February to 14 March 14, 2021.
If true, the added market supply should help temper the rapid price growth we are currently experiencing, whereby dwelling values have risen by 4.9% over the past quarter across the five major markets.
That said, we will only see a genuine cooling of the market once mortgage commitments and auction clearances begin to fall.
