Listings are key right now. But I’m not as worried as some.
Sydney is absolutely smashing it right now.
The property market has gone full boom-mode. Data from domain showed last week that house prices in Sydney grew by a whopping 5.3% in the June quarter.
It’s more than twice it’s long run quarterly average, and if it kept that pace up for another three quarters, we’d be looking at price growth of 20% a year.
Boo-ooming.
All the capitals are showing strong signs of growth. Melbourne posted its first quarterly gain in 1 months, while things in Adelaide and Perth were particularly strong.
So the market certainly has momentum. But can it be sustained?
Well that answer to that question hinges on what happens to listings. The current boom is being driven by a shortage of stock on the market. But there are signs that vendors might be slowly coming back to the market:
The market recovery could slow in the coming months if the recent unseasonal increase in new stock continued, said Nicola Powell, Domain’s chief of research and economics.
“That growth momentum is initially driven by the lack of listings, which has really supported greater competition between buyers and is the reason why we’ve seen such robust rates of growth, particularly coming out of Sydney,” Dr Powell said.
“But I think what we’ve started to see is the listings environment appears to be changing. The flow of new listings is improving, well before the spring selling season, likely spurred by the persistent pricing recovery or home owners selling due to the higher debt costs.
“As this trend continues, we’re likely to see a slowdown in the rate of growth to a more modest pace as the demand and supply equation rebalances.”
Yeah, maybe.
It is true that stock is picking up, at a time of year where you don’t normally see new listings coming on to the market.
New listings have lifted above the 5-year average in Sydney, Melbourne, Canberra and Darwin, according to Domain.
That said, it’s not higher by all that much. In Sydney its just 3%, so, you know, pretty average.
And the 5-year average begins in 2018, and defines a period where there wasn’t all that much stock on the market anyway. Like, do you remember the great glut of stock in 2019 and the crash in prices.
No. Because it didn’t happen.
And were talking about this being an “unseasonal” lift in stock, but I think Covid threw all the usual seasonal patterns out the window.
Maybe in a few years we’ll be talking about a ‘winter selling season’.
So look, I’m not fazed. Not yet.
But this is where we should be looking in the months ahead. If there’s a rush of new stock, that might slow the market down.
But if there’s not?
Then it’s off to the races.