Vendors strike as home buyer demand plummets

The Spring selling season usually sees a large uptick in the number of homes for sale.

Not so this year, according to new listings data from SQM research, which shows that total listings fell 3.5% nationally in August ahead of the Spring selling season:

Total property listings down in August.

New listings (less than 30 days) fell 1.9% over August 2022 to 70,766 properties on the market:

Fewer new property listings coming to market.

Whereas older listings (over 180 days) fell by 0.6% in August 2022:

Older property listings also falling.

Louis Christopher, Managing Director of SQM Research, noted that the fall in listings was unusual and suggests that Spring is going to be weaker on the activity front, with vendors cautious about selling into a falling market:

“Property listings surprisingly fell over the month of August right across the country.”

“Normally August is a month when listings start to rise ahead of the spring selling season. It would suggest to me spring is going to be weaker on the activity front. Vendors are clearly cautious to sell in this environment and there is no panic selling at this stage.”

Separate data from CoreLogic shows that sales volumes have also fallen significantly from the manic levels of 2021 amid weaker buyer demand:

Higher advertised stock levels are mostly the result of less housing demand rather than a rise in the number of new listings being added to the market. Nationally, CoreLogic estimates the number of home sales over the three months to August was -14.8% below the same period a year ago, but larger declines were evident across some cities including Sydney (-35.4%), Canberra (-18.9%) and Melbourne (-16.5%).

So it seems that vendors have responded to the weaker demand and falling prices by pulling back on listing their homes. Other things equal, this should moderate price falls; although rising mortgage rates are the far bigger driver of prices.