Property Listings Fall in April – Asking Prices Rise Again
By Louis Christopher on 6 May 2015
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The number of Australian residential property sale listings fell during April in most capital cities, as agents experienced a seasonal set back in listings due to the holidays. In contrast, Darwin recorded a modest rise in listings, according to SQM Research.
The Sydney market has become the ‘problem child’ for the RBA and it looks like Melbourne is now heading that way as well.
Nationally, the number of listed properties fell to 347,966 in April 2015, falling 2.8% from March 2015, with the number of listings down 0.1% from a year earlier. Sydney and to a lesser extent Canberra recorded the heaviest monthly falls, as a result weighing down the national average. Year-on-year results indicate that Sydney, Melbourne and Hobart experienced excessive yearly falls.
Melbourne recorded the biggest yearly change, with listings falling by 18.2%, reducing the number of properties for sale to 36,479. Sydney soon followed with listings down 13.7% from this time last year. Hobart also recorded a fall of 8.4%. Canberra’s downturn appears to be over with year-on-year figures showing a modest change of 4.6%.
Managing Director of SQM Research, Louis Christopher said “We are recording some large falls in listings particularly in Sydney and now Melbourne. In these cities there is no question right now that agents would be desperate for new listings. However there is the contrast where in Perth and Darwin, the markets there are clearly in a downturn with too much supply and not enough demand.
These numbers clearly illustrate there is no national housing boom. But clearly, the Sydney market has become the ‘problem child’ for the RBA and it looks like Melbourne is now heading that way as well.”
Asking prices in Sydney rose again, with a monthly rise of 1.4% for houses and 2.7% for units. The median asking price for a house has now reached $1,080,000 while the median unit in Sydney is now advertised at $609,600, according to SQM Research. Melbourne recorded a surge in asking prices with a rise of 4.2% for houses, and 1.7% for units.
In contrast, median asking house prices in Darwin continue to fall with year-on-year comparison showing a 12 month decline of 3.5%. Perth also recorded house asking price declines in the month of 3.1%.
Key points:
- Total online national residential listings fell during April 2015 to 347,966.
- This figure represents a fall of 0.1% when compared to the corresponding period of the previous year (April 2014).
- Sydney recorded the largest monthly decline in stock levels, falling by 11.2% during April 2015 to 19,648.
- Darwin recorded the highest monthly increase in stock levels of all the capital cities, increasing by 2.2% during the month to 2,008 and up a huge 42.7% year-on-year.
- Median Sydney asking prices continue to remain steady during April 2015, with the current asking price for a house sitting at $1,080,000 and $609,600 for units.
RBA Cuts Rates
Today’s rate cut will have a varied impact upon the housing market. It is unlikely that the cities of Perth and Darwin will end their downturn due to the rate cut, though it may well reduce falls in house prices for those cities. The impact of the severe commodities downturn far outweighs today’s rate cut though I am sure without the rate cuts in this cycle, existing property owners in those cities would be in a far worse situation than what they have on their hands now.
On the east coast of the country, there is no question the rate cut today is going to stimulate the respective housing markets even further. Sydney was already growing at a tempo of about 15%pa before today’s news. Indeed auction clearance rates in recent weeks suggest a tempo in the order of 20+%. Put it this way, auction clearance rates are now at their highest levels since records began in the mid-1980s. As noted above, listings are back to their January lows – a time when the market is normally in holiday mode and agencies have shut their doors. A reminder too that our forecast for Sydney was revised up to our scenario two point outlined in our September Housing Boom and Bust Report. That was for 11-15% capital growth for this year. The outcome will be on the high side of this.
Before today’s news. Melbourne was recording strong signs of a uniform pick up in prices. The rate cut today will now stimulate activity further across the city. Our revised forecast for Melbourne was 7-13% and I now think the market will certainly now go into double digit territory. Clearly the inner city for free standing dwellings is already doing this.
Brisbane so far has not responded to the rate cuts prior to today.There simply has been too much stock to absorb and the city has been somewhat negatively impacted by the commodities downturn and the previous state government being too harsh in reigning in the budget. But I think this rate cut is going to help Brisbane and will most certainly stimulate the Gold Coast and Sunshine Coast regions. We are unlikely to see double digit annual gains but high single digits is now what to expect for the next 12 months. 7-11% is the stated forecast for 2015.
Overall I am sure the RBA is now very keen on APRA taking more decisive action on investor lending. If APRA does not push the banks into investor lending restrictions, the RBA will not be able to cut rates any more in this cycle and indeed may be forced to lift rates to stop a national housing bubble taking shape. Fortunately there was news today that they are taking action with the announcement that Westpac was going to lift their servicing requirements. However it was pointed out the new servicing requirements were for all borrowers including First Home Buyers. I am not so sure that is what we all had in mind here.
