A late surge in new stock in Melbourne and Sydney will keep Australia’s east coast housing market active right up until Christmas and likely prompt it to reopen ahead of the traditional Australia Day holiday start date, consultancy SQM Research says.
As the country’s heaviest restrictions on real estate inspections and sales lifted in the Victorian capital, the number of new homes – those on sale for 30 days or fewer – more than quadrupled to 18,610 last month from 4404 in September, figures from SQM Research show.
Melbourne’s new listings were likely to increase again this month, based on the rising number of new homes coming to auction in recent weeks and a clearance rate that was increasing, rather than falling, SQM managing director Louis Christopher said.
In Sydney, where the market normalised earlier, new stock rose 12.7 per cent last month to 14,920. Higher numbers in recent months in the two largest cities have helped push their total number of homes on market up significantly from their level 12 months ago, in contrast to every other capital, where homes are selling faster than new ones are coming to market.
“The listings and auction market is going to run right through the last two weeks before Christmas,” Mr Christopher said.
“It is likely it will open up earlier. It’s likely most of the community will stay where they are for Christmas and the January holidays. No one’s going overseas yet – that’s for sure.”
Last week CoreLogic’s auction clearance rate rose to its highest level since March. SQM’s own more conservative figures also reflect a rising trend.
CoreLogic figures on Monday recorded the first national increase in dwelling values in five months. Melbourne, where home prices fell in October, is likely to return to growth this month. New home loans jumped to a three-and-a-half-year high in September.
The waves of the pandemic-riddled 2020 washing through to the national sport of property buying next year got an extra push on Tuesday from the country’s central bank.
The active market will be further spurred by the Reserve Bank of Australia’s further rate cut and unprecedented quantitative easing program that on Tuesday afternoon already prompted some non-bank lenders to pass on the additional 15-basis-point cut in full.
The SQM numbers on Tuesday showed that across the country, the number of homes listed for sale rose 6.5 per cent from September to 308,413 dwellings in October. This figure was still 3.3 per cent below the 318,874 homes on market nationally in October last year, due to year-on-year declines in stock numbers in every city apart from Melbourne and Sydney.
“Older stock sold at a quicker rate, making total listings fall,” Mr Christopher said. “To us, what that’s showing is that more properties were sold than added into the market for other cities – that’s quite bullish as well.”
Pricing changes would depend on how quickly the new stock on market was acquired, he said.
“If it moves quickly, it’s probably going to translate into higher prices,” he said. “If it does move, it tells us there are many buyers out there with a strong appetite for real estate.”
(AFR – Nov 2020)
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