This year has witnessed one of the most largest and broadest booms in the Australian property market’s history.
Australian dwelling values have risen by an extraordinary 20.9% so far in 2021, with every capital and region experiencing strong growth:
There are several factors behind this strong price growth. Record low mortgage rates and an acute shortage of homes for sale created ‘FOMO’ [fear of missing out] in the market. Household finances are in rude shape after they banked $200 billion worth of pandemic stimulus. Finally, jobs opportunities are plentiful with the number of job vacancies per unemployed and underemployed tracking near record lows.
However, as we finish 2021 momentum is now slowing, with FOMO leaving the property market.
According to data released today by CoreLogic, new listings are running at their highest level in at least six years:
And with new listings running faster than absorptions, total listings are now rising; albeit from depressed levels:
The same can be said for auctions. A record 4260 auctions took place last weekend, pushing Sydney’s clearance rate to its lowest level this year and Melbourne’s to its lowest level since mid-September.
Thus, after a prolonged period of FOMO whereby demand overran supply, supply has finally caught up, driving the slowing price growth.
On top of that, mortgage growth has also turned lower, suggesting property demand is waning.
The combination of slowing demand and rising supply points to one thing: slowing price momentum as we head into 2022.
FOMO is finally leaving the Australian property market.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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Not according to the RE agent MN Coast who listed a property a few hours ago and has been deluged with enquiries citing cashed up City buyers.
But then who believes them, and interest doth not a FOMO make.
My Shelly beach mate put an offer on 10 acres at Congarinni this week.
The fear is not with the cashed up, its in the desperate who don’t know if their deposit will make it into next week
Next week? Some won’t even last the day.
https://www.stuff.co.nz/life-style/homed/housing-affordability/300451785/mega-landlords-new-parents-sell-home-instantly-priced-out-of-moving-up-ladder
Another way of looking at it is that your currency has been debased 20% in terms of property by the RBAs money printing, artificially low rates and TFF.
Welcome to runaway inflation.
Brrrrrrrrrrrrrrrrrrrrr
https://fred.stlouisfed.org/series/WALCL
+1
https://www.abc.net.au/news/2021-12-02/obeid-backed-development-at-hawks-nest-to-face-legal-challenge/100623232
Point the bone
Anecdote. An old apartment in my area recently sold in quick time for a street record $800k. Another apartment owner in same building promptly evicted his tenants and listed at $850k expecting a quick sale. A month later the asking price was dropped to $775k, and recently again dropped to $730k.
Not sure if it is the tightening of credit, increasing supply, or the really desperate FOMO types having already purchased a property.
(somewhat) similar in my group of friends… a guy looking to relocate for work to Newcastle and sell his Sydney appartment. Was aiming for $830k which is what they paid for it 2 years ago. Someone in the apartment block sold recently for 790k needing to sell up quickly – RE agent saying he’s got no chance of achieving his target