SQM Research has released its Stock on Market data for March, which has recorded a heavy 16.7% year-on-year decline in the number of listings, with every market except Melbourne recording falls:
The total number of property listings across Australia continues to fall, driven by the smaller markets.
The decline in total listings came despite a solid 10.7% year-on-year increase in new listings (i.e. advertised for less than 30 days):
New listings have risen, whereas old property listings have shrunk.
According to SQM managing director, Louis Christopher, this is a sign of insatiable buyer demand, which points to ongoing strong price appreciation:
The property market is strong, and we can expect to see ongoing price gains this year. While overall listings fell, absorption rates continued to increase, so we saw overall property listings fall slightly over March, as they did in February; demand for property is still outstripping supply.
While JobKeeper has ended, absorption rates may slow a little, but the Australian economy remains awash with cash and with interest rates so low, we are likely to see sustained growth in property prices for the months to come, unless the regulators step in to cool the market, which is unlikely with COVID-19 still lurking in economies.
CoreLogic’s results for March supported these findings. The number of homes listed for sale has collapsed to record lows, running around 30% below the five year average. And this has come despite solid new listings:
Total for sale listings have collapsed to around 70% of ‘normal’ levels.
This comes against a huge lift in buyer demand, with house sales running near historical highs:
House sales are tracking around record highs.
Thus, the current state of the market is one where buyers are facing a sense of FOMO, with the whip hand clearly with sellers.
Throw cheap mortgages into the mix and gross rental yields that are well above mortgage rates outside of Sydney and Melbourne, and you have all the ingredients for a rapidly appreciating property market.
