Nationally, property sales have been running 30-35% ahead of new listings coming on the market.
This of course means that properties are selling quicker, vendors are not having to discount their prices as much (or at all) and property prices will continue to rise.
The total stock of properties on market for sale has declined sharply, now equivalent to just 10 weeks of sales at their most recent pace.
That compares to 20 weeks of supply at this time a year ago and a ‘normal’ supply of about 16 weeks.
The picture is similar across almost all markets, with a slightly more balanced picture in Perth being about the only exception.
What’s happened to buyer sentiment?
Sentiment-wise, the hit from the latest COVID-disruptions is yet to fully play out, but our sense on the ground is that there is still plenty of pent-up demand.
We’ll see how big a shock to the market the prolonged lockdowns in Sydney will be, however, if the experience in Melbourne last year is anything to go by, consumers are likely to ‘look through’ these disruptions and look to the future.
Westpac’s ‘time to buy a dwelling’ index has continued to track lower, falling a further 9.6% to 96.9 over the three months to July.
Only some of this relates to COVID disruptions with the more important driver being a continued deterioration in housing affordability.
The index is now 26.6% below its November peak and in net pessimistic territory, in other words, those saying it is a bad time to buy outnumbering those saying it is a good time.
COVID developments have obviously caused some disruptions, with the Victorian index dropping 9.3% during its lockdown in June but bouncing 25% in July prior to a return to lockdown a week after the survey.
The NSW index dropped 7.8% in the month of July.
However, a clear underlying trend decline is apparent across the board and mirrors the sharp surge in prices.
The 12.2% jump in dwelling prices nationally since the start of the year has taken affordability back to 2017 levels and this means response to this question about whether they believe it’s a good time to buy a property tends to decrease, however, this doesn’t mean consumers will stop buying properties.
Quite the contrary!
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