Sydney Asking House Price Gallops Ahead
By Louis Christopher on 8 Apr 2015
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The number of Australian residential property sale listings rose during March in most capital cities, led by accumulating stock in Darwin and Perth, though Canberra and Melbourne recorded an unseasonal fall in listings, according to SQM Research.
Nationally, the number of unsold properties reached 358,167 in March 2015, rising 1.8% from February 2015, with the number of listings up 1.6% from a year earlier. Normal seasonality plus the ongoing housing downturn in Perth and Darwin were the main reasons for the rise.
Critically though, Melbourne recorded abnormal decreases, with listings falling by 1.4% to 38,027 properties for sale. Melbourne listings are now down 14.7%, year-on-year, the biggest fall of any capital city. Canberra recorded a 2.6% decline to 3,401 listings.
Photo Source: sqmresearch.com.au
Sydney jumped back from the normal lull in February, with year-on-year listings down by 8.8%. The total number of listings in Sydney is now 22,123 residential properties on the market. Critically, asking prices in Sydney rose again by 2.7% for houses and 1.7% for the month for units. The median asking price for a house in Sydney is now $1,066,000.
It is perfectly normal for listings to rise in March as the market in February is still in the process of opening up for the new season. What was different in these results, however, were the falls recorded in Melbourne. We are now recording a clear downtrend in properties for sale in Melbourne, which suggests the market is picking up and there are now more buyers than sellers. Previously, Melbourne was very much a mixed market. But this suggests the recovery is becoming more uniform across the city.
In contrast, the commodities downturn has continued to suppress demand for both rental and owner occupier property in Perth and Darwin. Each month, we usually find that stock on market is accumulating, reflecting weak property demand in those two markets. This softness is expected to be ongoing given that the commodities downturn is only getting deeper, as we can see with the falling iron ore price. Median asking house prices in Darwin continue to fall with a year-on-year comparison showing a 12 month decline of 5.1%. Perth also recorded house asking price declines in the month of 2.8%.
Photo Source: sqmresearch.com.au
February’s interest rate cut, and speculation of another near-term cut in rates, will however help to underpin ongoing investor demand for property all around Australia. Indeed, we can still expect to see modest price gains for properties in most capital cities this year, led by Sydney. Our forecasting modelling suggests that the current low interest rates and the low Australian dollar, which is helping to attract offshore interest to our property markets, will be increasingly stimulatory to the Melbourne and Brisbane markets as well as Sydney.
Key Points
- Total online national residential listings rose during March 2015 to 358,167.
- This figure represents a rise of 1.8% when compared to February 2015.
- Darwin has again posted the largest monthly percentage gain in stock levels, rising by 7.3% during March 2015 to 1,964.
- Darwin has also recorded the highest increase in stock levels of all the capital cities over the year, increasing by a staggering 42.6% from March 2014.
- Canberra recorded the largest monthly percentage decline in stock levels, falling by 2.6% during March 2015 to 3,401.
- Melbourne posted the largest annual percentage decline in stock levels, falling by 14.7% during to 38,027 from a year earlier.
