SQM Research has released its stock on market data for March, which shows that unsold homes are building up across Australia.
Overall listings nationally rose by 7.9% in March to be up 14.2% year-on-year:
All jurisdictions other than Perth have seen listings rise over the year.
New listings (less than 30 days) remain 11% below their level at the same time last year, led by heavy falls across the East Coast capitals:
However, older listings (greater than 180 days) have soared 39% year-on-year, with all markets other than Darwin recording rises:
Commenting on the result, SQM Managing director Louis Christopher noted that “a looming glut” of older stock is developing, especially across the nation’s capital.
Christopher also noted “there is now more property listings in the market than what we recorded this time last year. However total listings remain well below long-term averages”.
“On previous downturns, total listings for any given month would typically rise above 300,000 properties for sale. We are simply just not seeing those numbers in this cycle and it is one of the key reasons why the housing market has not corrected more than feared”.
In other words, there is currently a lack of urgency for vendors to sell, despite 3.5% of interest rate hikes from the RBA. And this dearth of listings is helping to support prices.
The next three months will be interesting given 222,765 cheap fixed rate mortgages are set to expire between April and June, which will reset to variable rates of around 6%:
Thus, there is still the potential for large numbers of forced sales, which could cause a double-dip price correction.
SQM’s stock on market data is worth watching closely as it should give the first indication of forced sales.
