For sale listings pile up across Australia’s housing market

New data shows that the number of homes listed for sale nationwide has risen sharply in 2022, which has in turn resulted in homes taking longer to sell.

Nationally, it took an average of six days longer to sell a property in the three months to April, compared with the previous quarter. Houses in Sydney were on the market for an average of six days longer, while Melbourne homes took an average of four days longer to sell.

There has also been an increase in the number of dwellings that take more than 180 days to sell. And the increase in property listings has prompted some vendors to reduce their asking prices.

From The AFR:

Old property listings

“Market conditions continue to shift as more homes are being listed for sale than being purchased, continually nudging greater purchasing power to buyers,” said Nicola Powell, Domain’s chief of research and economics.

“The first three months of 2022 saw the highest number of newly advertised homes for sale over a March quarter since 2014, soaring 19 per cent above the five-year average in Melbourne and 15 per cent higher in Sydney.

“The availability of homes for sale is building, with the total supply sitting 8 per cent above the five-year March average and continuing to improve buyer choice”…

“We are expecting total listing numbers will gradually rise, mostly due to less buyer demand,” said Tim Lawless, CoreLogic’s research director.

“As total listings rise, buyers will have more stock to choose from, less urgency in their decision-making, and more ability to negotiate on price. These factors will likely further dampen price growth” [Louis Christopher, SQM Research managing director said].

“Old listings appear to now be trending up after two notable years of declines. It means absorption rates are falling and stock is accumulating up once again. Vendors are having increasing trouble selling”.

The expansion in for sale listings likely relates to the contraction in buyer demand, which has caused sales volumes to fall heavily so far in 2022 versus the extreme volumes experienced last year, according to CoreLogic:

Australian property sales

Accordingly, the median day’s on market has edged up from last year’s FOMO levels:

Median days on market

Vendor discounting has also edged higher:

Australian vendor discounting

This is only the beginning. With mortgage rates set to rise sharply and house prices expected to fall, buyer demand should collapse. But it will only become a ‘problem’ for the market if lots of home owners are also forced to sell, thereby leading to a sharp rise in listings.

Otherwise, vendors will do what they always do during corrections – wait until market conditions improve before listing their homes, thereby balancing reduced buyer demand with reduced vendor supply.

Unconventional Economist
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Comments

  1. pfh007.comMEMBER

    It appears that the implications of rising interest rates on residential asset values are getting through to the speculator jet set and many are busy listing some of their punts in the hope of catching a few buyers who are not paying attention.

    Quite a few long term rentals in Parra have sprouted large pictures of smiling agents on the front lawn in the last week.

      • RE sales is a volume game, plenty of agents were also part of the profitless boom given their properties were setting records every weekend but they had so few of them to sell. For the Agents, if the bear porn proves correct then 20 desperate vendors and 5 buyers is probably a better problem to have than 20 desperate buyers and 2 sellers.

        • pfh007.comMEMBER

          I think the agents prefer properties to be selling like hot cakes.

          After the ALP turned down the stimulus after the GFC in about 2011 the property market became very sludgy. I recall running into agents at other agents auctions as they were keenly trying to get a feel for what was going on. Not much in most cases. Most were quite gloomy because they figured that governments and central banks would be reluctant to goose property markets any time soon after the GFC.

          How wrong they (and most of us) were.

          They cheered up enormously when the Liberals got in and gave a big green light to another round of debt enhanced property speculation.

          It quite remarkable that we find ourselves in a situation only 15 years after the GFC where an even bigger asset bubble (fueled with even cheaper and easier debt) has been allowed to develop and everyone is in hysterics about the target rate rising to 0.35%.

  2. Boom.
    You mentioned in a previous post a guy called Tinkler. I assume you meant Nathan Tinkler.

    He was walking up the grandstand steps of the footy team he had recently acquired. I think it was the Newcastle Knights from memory. The newspaper in Qld. itemised the clothing he was wearing as being worth a total of $200 ( inc. the shoes ) and claimed he was a real “Man of the people” who shopped at Lowes.

    A few short weeks later a picture of a new Ferrari still smouldering after being stolen and burnt out the evening before was in the same paper. Nathan said he hadn’t got around to upgrading his house security or his insurance. Pity that.

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