Record-low property listings across Australia, coupled with rising buyer demand, have increased competition among buyers and contributed to price growth.
The number of residential properties advertised for sale this spring has been lower than last year across every capital city despite stronger selling conditions, according to CoreLogic.
In the latest issue of CoreLogic Property plus, the property research group revealed that the fall in homes for sale could be due to both less fresh stock being added to the market together with a rise in buyer activity.
The number of new listings added to the national housing market through November was up 56 per cent from the quieter winter months, but compared with previous spring periods, newly advertised stock has not been this low since CoreLogic began tracking listings in 2007.
Based on a count of new and total listings over the first four weeks of November, both new listings being added to the market and total listing numbers were down compared with the same period a year ago across every capital city.
With buyer demand rising and fresh listings at a lower than normal level, the total number of advertised properties available for sale is also tracking at historic lows, down 12.4 per cent nationally compared with last year, and the lowest reading for this time of the year since 2009.
CoreLogic head of research Tim Lawless said: “With buyers taking advantage of the lowest mortgage rates since at least the 1950s, along with an improvement in credit availability/borrowing capacity, market activity is rising”.
“With such a small pool of stock available for sale, competition amongst buyers is increasing, adding a sense of urgency to the market, which is another factor supporting price growth at the moment.”
The largest drop in new listings numbers can be seen in Darwin, down almost 40 per cent compared with last year, while Hobart dropped 23.3 per cent Perth decreased by 23 per cent.
Total listing numbers were the lowest relative to a year ago in Sydney (down 23.1 per cent), Perth (down 16.1 per cent) and Melbourne (down 15.7 per cent).
“The low number of spring listings likely reflects a combination of factors,” Mr Lawless said.
“In markets where housing conditions have been weak, like Darwin and Perth, a lack of vendor confidence is understandable. Selling conditions have been tough in these markets since 2014 and prospective home sellers are likely wary of the challenging selling conditions, where homes are taking a long time to sell, discounting rates are high and properties are often selling for a lower amount than what they were purchased for.”
The lower numbers in Sydney and Melbourne are more surprising. Mr Lawless attributed this to overall lower consumer confidence in the economy and future household finances.
He cited another factor related to the speed of the market recovery.
“It was only five months ago that housing values were still broadly falling. Preparing a property for sale involves a number of processes that take some time, including making the decision to sell, finding an agent, preparing the home for sale and commencing a marketing campaign,” Mr Lawless said.
Taking this into consideration, Mr Lawless said if selling conditions remain strong through early summer, there could be a chance of the market being tested with a larger number of listings through early December or the first quarter of 2020.