Property for sale inventory crunched again

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:

Total property listings

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 property listings vs old

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:

Australian property 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:

Australian property sales

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.

Unconventional Economist

Comments

  1. my toranaMEMBER

    Apropos of nothing, I’m calling it for Canberra. Turning point. listings will start to outnumber sales. no reason but I wonder if we’ll also have the impact of turfing out renters. we had a no-turf policy for a year that ended some time in March.

  2. peterbruceMEMBER

    I picked the boom beginning in Adelaide south, March last yr and I have a strong sense now that we have passed the peak. Numbers at opens are well down and houses that were sold as soon as they hit the market, are now lingering for at least a few weeks.

  3. BubbleyMEMBER

    Sunshine coast properties have been selling on the day they were listed.
    Some that would have done that a month ago have been up for almost two weeks and not sold… yet.

    This has coincided with the end of Job Keeper, which is interesting.

  4. Andrew Veniamin

    So – according to YOUR OWN DATA – listings are increasing in every single market except Adelaide, Canberra and Hobart ??!!!

    Literally there are no words for how ludicrous this post is mate. Cherry picking has been taken to a whole new level.

    Yes – There are less listings during one of the worst pandemics in world history than there was 12 months ago before it started.

    Honestly – WTF are you trying to achieve with this spruik ?

    How about telling your punters what the IMF just published this week regarding Australian house prices ? You know – some actual analysis and news rather than posting daily Core Logic tripe.

    This website has completely lost its purpose – entirely.

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