The number of properties being advertised for sale nationally has risen sharply during the spring selling season of this year and the current volume of stock on the market is higher than those levels recorded during the depths of the GFC.
Typically as the spring season arrives there is a ramp up in listings. An analysis undertaken in an earlier Property Pulse detailed that over the past five years spring has recorded the greatest number of listings whilst autumn has actually been the busiest season for property sales. During this spring, the number of properties available for sale has risen sharply at a time when housing finance volumes have been trending lower since September of last year and property value growth has been flat since June of this year.
The result of these conditions have been that at a time when fewer people have been actively looking to buy properties, a substantial amount of new stock has entered the market. Ideally, these vendors should have listed their properties earlier in the year when property values were still increasing and buyers were more active rather than waiting for spring.
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Since the last week of August 2010, the total number of listings nationally has increased by 16.5%, in the capital city market listings have climbed 21.9% higher.
Across the major states, total listings are at the highest levels within Queensland. Across the state there are currently 75,655 properties advertised for sale which is the highest volume since RP Data started tracking listing volumes in 2007. This result highlights the challenges for real estate professionals and peripheral industries as well as the competition vendors are being faced with across much of the state.
Despite Queensland being the country’s third most populous state, the number of property listings in Queensland are 15% higher than what is being recorded in New South Wales and 61% higher than Victorian listings. Since September 2009, Queensland has consistently recorded a greater volume of stock advertised for sale than that within New South Wales.
While the amount of available stock on the market nationally has been increasing and is at historically high levels, across the combined capital cities total stock levels remain below their 2008 peaks. Within the individual capital cities the total number of listings for the final week of spring are, in all instances, higher than last year. Darwin (74.7%) and Perth (38.0%) have recorded the greatest increase on last year’s listing volumes whilst Melbourne (12.8%) and Sydney (14.1%) have recorded the slightest increases amongst capital cities.
Within Brisbane and Hobart the number of properties advertised for sale are at their highest level since the beginning of 2007. In all cities except for Sydney, Perth and Canberra advertised stock is currently less than 5% below the peak during the past three years.
On a national basis, total listings are currently at their highest level since the beginning of 2007. Also of interest is the quantity of stock being advertised for sale during the last month: 126,858 or approximately 51% of listings are within capital cities whilst the remainder lie outside these regions.
In recent years approximately 65% of dwelling sales nationally have occurred within the capital cities. With the capital cities accounting for a significant majority of sales, these regions are currently only responsible for 51% of listings. This result highlights the ongoing struggles within regional areas of the country. Many of these regions are being negatively affected by a significant volume of listings and minimal demand for homes. The high Australian dollar and lack of demand from ‘sea changer’ and retirees is seriously hampering these markets.
As we draw closer to the Christmas / New Year period many vendors have historically chosen not to advertise their property during the festive season. It may be the case this year that many vendors will choose simply to keep their home off the market until market conditions improve.
The real test for the property market will be around February of next year. Last time listings mounted to similar levels as they are currently the number of properties advertised for sale did not return to the pre Christmas levels. During the other two post Christmas periods detailed the volume of listings rapidly returned to pre Christmas levels in February.
Should listings return to current levels it will indicate that there are many vendors who, for one reason or another, are willing to brave the slow market conditions and press ahead with the sale of their home. If listings don’t return to their current levels around February it probably means that many vendors have reassessed their position and preferred to hold off selling until conditions improve.
Overall, listings data during the early part of 2011 will provide a very timely indicator and significant insight into the overall health of the Australian residential property market.
Tim Lawless is the Director of Property Research at RP Data.