Signs point to slowdown in runaway home prices By Kirsten Craze
After months of slim pickings on the property shelf thanks to extended lockdowns up and down the east coast, at least home buyers in one city finally have more choice according to new research by REA.
The latest PropTrack Listings Report for September 2021 has revealed that property stock levels in Sydney are on the rebound with an 11.9 per cent month-on-month jump in new listings on the market for August.
The monthly report, which analyses new and active listings on realestate.com.au, gives buyers and sellers an overview of how much supply is coming onto the market. An increase in homes for sale (and therefore more options for buyers) could ultimately lead to a slowdown on runaway prices.
Early spring has shown there are already green shoots of recovery in the supply chain for the Harbour City, while other eastern seaboard cities experienced month-on-month declines in new listings including Melbourne which was down -27.1 per cent, Canberra -35.1 per cent and Brisbane -4.9 per cent in August.
Nationally, new listings for properties for sale on realestate.com.au fell -2.3 per cent month-on-month in August, reaching levels last seen in January 2021. Although down for the month, national new listings were actually 17.1 per cent higher than at the same time last year when Australia was still in the midst of Covid confusion with no vaccine in sight.
The year-on-year analysis also showed the seller sentiment disparity between our two biggest cities. While Sydney’s new listings were up 11.9 per cent in August, the figure is -8.1 per cent below where it was 12 months ago. On the flip side, Melbourne’s new listings number for August might have been lower than it was in July, but when 2020 and 2021 are placed side-by-side new listings in the Victorian capital are up a whopping 202.9 per cent.
Cameron Kusher, director of economic research said total listings (which includes both new and long term listings realestate.com.au) were at record lows.
“With many sellers waiting in the wings for lockdowns to end, total listings fell in August by 3.8 per cent over the month to reach a new historic low. Older stock may continue to catch buyers’ attention until lockdowns end and there’s an uptick in new listings,” he said.
Sydney’s positive rebound for August was likely due to the much-anticipated timeline announced around easing restrictions.
“The national property market slowed in August with a number of states in lockdown, however announcements from the NSW Government about a pathway out of lockdown, coupled with the ongoing ability to conduct one-on-one inspections, instilled confidence in Sydney sellers,” he said.
“While lockdowns have impacted the preparedness of vendors to list, buyer demand has not been dampened. Enquiry to agents on realestate.com.au hit a historic high in August, so too did the number of views per listing. With ongoing high levels of buyer demand and sellers delaying listing through lockdown, we anticipate new listings will rise quickly as restrictions ease,” Mr Kusher added.
Although lockdowns look set to continue throughout the coming month, Mr Kusher said that if recent history is an indication of future behaviour then sellers across the country will be quick to regain their confidence upon the lifting of restrictions.
“One-on-one inspections, coupled with a pathway out of lockdown, proved valuable in August with sellers in Sydney showing signs of confidence. Looking forward, while lockdowns are likely to still be in place in the ACT, NSW and Victoria through September, some restrictions are set to ease. Given the experience from Melbourne’s lockdown in 2020, and the ongoing level of high demand, we are confident that once lockdowns are over seller confidence will rapidly return and new listings are likely to rise quickly,” Mr Kusher said.
He said strong selling conditions were evident across the non-eastern mainland markets, especially in Adelaide, where new listings jumped by 37.3 per cent in August following a snap lockdown in July. Hobart’s new listings were up 22.4 per cent while Perth had a 7.2 per cent month-on-month increase.
Mr Kusher added that although spring is traditionally a hot season for selling property, the continued lockdowns would continue to wreak havoc with stock levels for now, which naturally flows through to prices.
“It appears unlikely demand and supply will return to equilibrium in the short-term, which is likely to lead to further increases in property prices,” he said.
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