Spring Selling Season Has Started
As lockdown restrictions ease across Sydney, Melbourne and the ACT, the spring selling season has started in earnest, and vendors are piling properties onto the market.
New listings have surged 28.2% nationally in the four weeks to mid-October, amounting to more than 45,000 new properties added to the market. The news could be a relief for buyers, because it means they have more stock to choose from after an extended period of relatively short advertised supply.
But this raises important questions: is the freshly advertised stock sitting in parts of Australia where people actually want to buy? Or, is this an indicator of vendors trying to offload properties that have not seen high levels of demand? Looking at listings data in more detail, it seems that the answer is a bit of both.
Unit stock is rising at a faster rate than houses
The COVID pandemic has shaped distinct preferences in housing demand, with detached houses proving more popular than units, and the biggest price uplifts occurring across coastal and lifestyle markets in the capital cities and regions.
Of the 45,171 new listings added to market over the past four weeks, 71.7% were houses, but this is down from a five-year average where houses typically make up 74.0% of new listing campaigns. Unit listings freshly added to market have risen 39% in the past four weeks, compared to a 24% rise in new house listings.
Compared with the pre-COVID five-year average, new house listings are still trending -5.5% lower. Meanwhile, unit listings are trending 11.2% higher. Given the relative popularity of detached housing through the pandemic, where national house values have increased 22.9% in the 12 months to September compared with a 12.0% rise in units,
buyers may still find the volume of house listings relatively constrained.
The majority of capital cities and regions are still seeing a decline in total stock levels
It is also worth noting while new listings have grown substantially, total advertised stock remains fairly tight. Total listings refer to the count of all advertised stock, not just that which has been newly advertised in the past four weeks.
Most of the uplift in total stock has been across Melbourne, Sydney and regional Victoria. Smaller increases in stock levels have been seen across regional Tasmania, Hobart and the ACT. However, every other regional and capital city market is experiencing a fall in total stock levels.
There has been an increase in stock across some popular pockets of the market
The regions where total listings volumes have increased the most over the past four weeks shows a mix of desirable, owner-occupier markets and investor-concentrated markets where housing demand has been more subdued through the course of the pandemic.
Most of the regions with the biggest listings uplift in the past four weeks are concentrated across Melbourne and Sydney. These include markets that have been associated with more subdued capital growth, such as Melbourne’s Wyndham council, where values are 5.8% higher over the year, and Stonnington, where values have risen 8.3%, compared to a Melbourne-wide uplift of 15.0% in dwelling values.
What is interesting is there has been a big jump in volumes across markets that have been extremely popular through the pandemic, such as the Mornington Peninsula in Victoria, where total listings increased by 261 campaigns over the past four weeks.
The Mornington Peninsula region has been one of the highest-growth markets in the country, where dwelling values have risen 35.3% in the 12 months to September.
The same can be said for the Northern Beaches of Sydney, where dwelling values have increased 37.2% in the same period, and listings campaigns have increased by 112 in the past four weeks.
A handful of popular regional NSW markets such as Newcastle and Wollongong are now also seeing some reprieve in the form of supply, though the level of stock on the market is still well below the previous, five-year period.
Based on what has been observed in previous years, new listings volumes are likely to continue rising over the coming weeks, before a seasonal decline from around mid-to-late November. The highest growth in listings still seems concentrated in less desirable markets for owner occupiers, such as in the unit segment and across high investor concentrated markets across Sydney and Melbourne. While there are signs vendors are responding to the high price growth in some of the popular or coastal markets, which could create more bargaining power for some buyers, listings volumes are in many cases still well below historic averages.
With investor activity also stepping up through 2021, the lift in advertised supply across areas more aligned with rental housing is arguably well timed.
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