Recently released figures from property research house SQM Research show residential real estate listing numbers rose around the country during July, pointing to an increasingly softening market.
This flood of new properties for sale indicate that market growth will continue to flatten and more discounts will appear even during the traditionally strong Spring selling season according to SQM Research.
SQM believes their Listing Index represents “the first and most timely series outside of auction clearance rates to indicate the overall health of the Australian property market.”
Their report goes on to say:
During the traditional winter slowdown from June to July, listing numbers in a normal market have historically remained flat or recorded a marginal drop. This year, the SQM Index has recorded three consecutive months of increase in supply, with total national online property listings rising by 5.1% during July to 309,000 listings.
Further, national listings are up 28% compared to July 2009, when there were 241,783 residential properties advertised for sale.
SQM Research managing director Louis Christopher said the rise is illustrative of a slowing market which is affected by more than just seasonal factors.
“Vendors have been more often than not failing to get the price they’re after. The old stock hanging on the market is competing with new stock coming on, resulting in an increase in overall supply” Christopher said.
“The only capital city where supply has remained fairly consistent over the previous year is Sydney, indicating that this city is likely to represent the most stable market currently.”
“With the additional expected increase in listing numbers for the spring selling season, we expect national listings may reach a high of around 370,000 advertised properties by December.
The SQM figures show Melbourne recorded the most new listings; with 31,433 properties listed for sale in the month July, an increase of 6.97% more properties for sale than this time last year.
Sydney has 27,617 proeprties for sale – a 5.49% increase in the number of properties for sale over the last 12 months.
The largest percentage gain was in Darwin, with 1,414 new listings and increase of 9.02%.
Christopher says this environment will last until one of two things happen – “either a major economic upswing, “which is dependent on what happens overseas”, or government intervention in the form of stimulus.”
“There will also be movement once there is an interest rate cut, and we believe that will happen eventually into next year.”
Yes – we have moved into a buyers market, which means there are some great property opportunities for those who are able to invest countercyclically.
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