Vendors hibernate ahead of a spring listings spike


As household balance sheets become more thinly stretched due to rising interest rates and high prices for essential goods such as fuel and food, there is a renewed level of focus on how mortgagors (i.e. homeowners with mortgage debt) are traversing the changing environment.

Policymakers and lenders will be watchful for any signs of distress across the housing sector.

One of the first signals of mortgagor distress could be an out-of-cycle rise in the number of homes being added to the market.

Property Market

So far the trend in new listings across Australia has generally followed ‘normal’ seasonal patterns, with no evidence of panicked selling or a rise in distressed stock coming on the market.

The flow of new listings is generally in line with last year and shows a little divergence from the pre-COVID average at the macro level.

Nationally, the flow of new listings added to the market has been reducing since late March, when 46,603 houses and units were newly listed over the four-week period ending March 20th.

Since that time the four-week count of new listings has trended lower, with CoreLogic recording 37,476 ‘fresh’ listings over the most recent four-week period ending July 17th; 19.6% lower than the March 20th high and 1.4% fewer properties relative to the same time a year ago, but 1.5% above the pre-COVID average (which includes the ten-year period prior to 2020).

Importantly, the impact of COVID-related restrictions can influence year-on-year comparisons, especially in cities like Melbourne and Sydney where more frequent outbreaks occurred.

It’s why the pre-COVID average is also a useful benchmark.

While the flow of fresh stock added to the market has trended lower, the total count of listings has held relatively firm, reducing from a recent peak of 149,327 over the four weeks ending March 20th to the most recent count of 144,222 (a reduction of 3.4%).

The relatively steady number of total listings amidst a sharper reduction in fresh listings highlights a slower rate of absorption across the market.

Through the June quarter, the number of home sales was estimated to be 15.9% lower than a year ago, reflecting less buyer demand.

The slower rate of absorption is likely to worsen as rapidly rising interest rates and low confidence dampens buyer activity further, suggesting even as new listings trend lower through winter, the total advertised supply is likely to rise through the second half of the year.

Property Market2

While the national trends provide a macro context, the trend in listings is remarkably diverse across the capital cities and regional markets of Australia.

Regions where housing values have been trending lower, including Sydney and Melbourne, are showing a more obvious reduction in new listings, but these are also the two capital cities where total advertised stock is now trending at levels above the pre-COVID average.

Conversely, stronger markets like Adelaide and Perth are seeing a relatively steady trend in new listings, but overall stock levels remain well below average with no evidence that advertised supply is starting to rise.



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