More evidence property market is running out of steam

Last week, CoreLogic’s Research Director, Tim Lawless, provided seven early indications that Australia’s property market is beginning to slow. These were:

  1. Slowing growth of the daily dwelling values index;
  2. Falling auction clearance rates;
  3. Rising new listings;
  4. Rising dwelling commencements;
  5. Falling net overseas migration;
  6. Reduced fiscal stimulus; and
  7. Growing affordability constraints.

These developments led Tim Lawless to conclude that housing values would likely “continue to rise throughout 2021 and most likely throughout 2022, just not at the unsustainable pace of growth that has been evident over recent months”.

The REA Insights Weekly Property Search Report provides another indicator that Australia’s property market is beginning to slow, with search activity on realestate.com.au falling sharply from March’s peak; although it remains well above last year’s levels:

Change in 'for sale' searches

‘For sale’ searches have moderated sharply from last month’s peak.

As shown above, for sale searches were up 97% year-on-year in the week ended 28 March 2021. However, this retraced to 45% in the week ended 25 April.

For sale searches are down significantly from March’s peak across every capital city market (search for yourself here). Nevertheless, search activity remains well above last year’s level as follows:

  • NSW +35%
  • VIC +43%
  • QLD +40%
  • WA +40%
  • SA +34%
  • NT +32%
  • TAS +30%
  • ACT +60%

This suggests that price growth will remain strong, albeit significantly lower than March’s record price gains.

Unconventional Economist
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Comments

  1. > More evidence property market is running out of steam
    Yippeeeeee!!!

    > This suggests that price growth will remain strong, albeit significantly lower than March’s record price gains.
    Booooo!!!

    It must be Gods will.

    Our ScoMo, Who art in heaven,
    Hallowed be Thy Name.
    Thy House Price come.
    Thy Will be done,
    on earth as you’ll be happier in Heaven.

    Give us this day our daily bread.
    And forgive us our trespasses,
    as we forgive those who trespass against us.
    And lead us not into temptation,
    but deliver us from Social Media. Amen.

  2. Whats with this bloody country.

    First we get house prices, then the religious nutjob known as ScoMo, Covid, Feminism… Whats coming next?

    Honestly, if UFO’s landed in Australia or a Chinese war started, I doubt I’d even be surprised. I wouldnt even bat an eyelid. Just another day, really.

    Whats next? ScoMo sells Australia to the Chinese? lol. Im just waiting for it.

    • Scomo and his mates have overseen the selling of Australia to the Chinese for over a decade already. It’s like the scene from the first Mad Max:

      Wang: “Kick it in the guts, Wong”

      Wong ( Revealing map of Chinese possession over former Australian territory):” She’s the last of the resource rich continents.”

      Wang “ Shut the gate on this one Xi Jinping, it’s the duck’s guts.”

      Wong: “ She’s the last of the resource rich continents. Covered in iron ore, sparsely inhabited, gullible and vulnerable population, ample space for our needs.”

      Xi stares in awe at the map.

      Wang: “Hes in a coma, mate”

      Wong: “ He loves it!”

      Xi runs his hand lovingly over the map then turns to Wong and Wang : “How in hell did you get all this together?”

      Wong( jubilant)” Aww, you know mate , a piece from here and a piece from there.”

      Xi: “ So easy?”

      Wong : “ Yeah!”

      Wang : “ Come on Xi, you’ve seen it , you’ve heard it and you’re still asking questions?!”

      Xi Jinping ( smiles broadly): “When do we go for a ride?”

      https://www.youtube.com/watch?v=qUi5Lo9SHTY

    • BoomToBustMEMBER

      ScoMo aint religous, he is a wolf in sheeps clothing. He is playing the game, he is just as evil as all other politicians. Its the difference between know what to look for when determining the difference between gold and fools gold, similar in appearance, one is worthless, the other is very valuable.

  3. Jumping jack flash

    As expected.
    Super money ran out.

    Where’s the next lot of money coming from?
    Nowhere, that’s where.

    Wages will return to their deflation as soon as slaves are given the green light.

    There will be no CPI as a result.

    But the interest payments will still need to be taken from the productive economy and handed to the banks while their $2 trillion dollar nonproductive debt wad exists.
    The interest bill for that privilege (just mortgages) is still around 100 billion a year. I doubt much has changed in that regard.

    With no CPI and no wage inflation how is the debt going to grow fast enough to mitigate the deflation from the interest?

    • I was talking with a friend on the weekend who told me a story about someone who saw a house for sale near Vic coast for $450K – bargain they thought. Real Estate agent said check if you have any super. She did – so she took it all out and bought the investment property.

      I simply could not believe that this was possible under current laws. That you had to set up a self managed super fund etc and there were laws around withdrawing super.

      Nope – just take it out and buy – they said was so easy, hardly had to do anything.

      • Jumping jack flash

        Interesting.

        Maybe there is hope yet, but just for investment i guess.
        There’s about 2 trillion dollars of super burning a hole in everyone’s pockets. Imagine that leveraged at 95% LVR. It’d buy a fair chunk of debt!

        • 100% not true.

          You can only use super to purchase property via a self managed super fund.

          ATO has issued multiple warnings that they are targeting people who have lied about their super withdrawals and spending.

          Further super withdrawals for financial hardship impact directly on your credit rating.

          • Okay, you must use a SMSF. But point remains only for investment purposes.

            For your credit rating, the financial difficulty causes the hit not the withdrawal of super. If you get a default notice for your mortgage, you can apply to withdraw some super. This has been the case for quite a while now.

  4. pfh007.comMEMBER

    Just need moar ZIRP, NIRP, QE and TFF.

    They are not going to let the housing market start sagging before the borders open and they can let in a torrent of middle class foreigners desperate for a COVID safe bolt hole.

    A few hundred thousand units left vacant and unavailable for rent for the next 10 years should keep the housing market inflated.

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