Is there an oversupply in Melbourne?
The question of supply levels is a vexed one.
After all a high level of supply can be great for buyers as it can dampen price growth, but as most buyers are sellers too it is not that simple.
The question is also hard to comprehensively answer, as there are a wide range of data sets and stages in the development cycle to compare.
At a citywide level the volume of homes on the market at any given time is a good measure.
In the month ending on the 9th of November there were 4.5 per cent more homes newly listed for sale and 6.6 per cent fewer overall homes for sale in the Melbourne property market.
Given values have been rising that suggests that there is not oversupply of homes for sale, buyers are buying the new homes and the older stock is also reducing.
But what of the unit market?
A casual glance at the Melbourne skyline shows a lot of new high rise residential towers being constructed.
Our data shows that those units are finding buyers.
The number of units listed for sale is marginally, 2.4 per cent lower than a year ago, and the overall number of units on the market is 3.3 per cent higher.
That suggests that the supply is exceeding demand to a greater extent than is the case in the houses market.
That is not necessarily a bad thing.
Over the past decade the state government’s policies to address housing affordability concerns have been centred on increased supply in the inner city unit market and outer suburbs.
The data shows that it is working.