New residential property listings are ramping up quickly in 2016: Cameron Kusher
Across the country there were 47,483 unique new property listing over the 28 days ended 7 February 2016. The number of new property listings is 11% higher than at the same time last year.
If we look back over recent years it is the highest number of new property listings at this time of year since 2010. If we look at the combined capital cities we have also seen a large ramp-up in new listings with 27,430 new listings which is 5.4% higher than at the same time last year.
Again it is the highest number of new property listings over the corresponding period since 2010. The first chart shows that over the Christmas / New Year period there is typically a sharp fall in new listings. If history is any guide new listings are likely to continue to rise until the middle of March.
Total residential property listings experience a seasonal fall each Christmas / New Year period however, the slowdown is nowhere near the magnitude of the slowing in new listings. The most recent data in the chart also indicates that total listings are actually starting to decline. Across the country there are 239,398 total unique property listings which is -1.6% lower over the week but 0.2% higher relative to the same period in 2015.
For the combined capital cities there are 99,137 total unique property listings which is -1.0% lower over the week but 2.6% higher year-on-year. Much like new listings, total listings typically continue to rise up until the middle of March each year. Given this it will be interesting to see if the fall in total listings over the most recent week will be short lived or whether there are some different factors at play.
If we look at the number of listings across the individual capital cities there are some rather interesting differences across the cities. While new listing overall are higher than a year ago they are lower in Sydney and Darwin.
In fact new listings in both Sydney and Darwin are at their lowest level for this time of year since 2012. Elsewhere new listings in Melbourne and Brisbane are at their highest level on record (since 2007) for this time of year. In Adelaide and Perth new listings are at their highest levels for this time of year since 2010 and in Hobart and Canberra they are at their highest levels at this time of year since 2014.
Whether the surge in new listings in most capital cities is in response to a belief that housing demand is improving or trying to beat a potential slowdown remains to be seen. The rise in Perth new listings in particular is counterintuitive considering it has been the weakest capital city housing market over the past twelve months and you would expect given those conditions fewer people would be looking to sell.
Turning to total listings, although they are 2.6% higher year-on-year across the combined capital cities, Sydney, Perth and Darwin are the only cities in which total listings are higher than a year ago. This seems more in-line with market conditions with concerns the Sydney market is slowing and values falling in Perth and Darwin it appears that total listings reflect the slowdown in sales activity in these markets.
If we look at the other capital cities relative to the same time of year previously, Melbourne listings are at their lowest level since 2011, Brisbane its lowest since 2008, Adelaide and Hobart listings are at their lowest levels since 2010 and Canberra listings are at their lowest level since 2014. The relatively low level of stock across these cities has the potential to spark competition for the available stock and lead to increasing values.
Of course this would only occur if buyer demand is also rising and it is a little too early in the year to tell if that is occurring.
The CoreLogic RP Data Listings Index tracks pre-listing activity by real estate agents across our proprietary platforms. The index points to properties about to be listed for sale and correlates with new listings data.
At a national level, the listings index is at its highest level since early October of last year however the seasonally adjusted data still shows the seasonal slowdown. In terms of a comparison to the current reading compared to the comparable week in past years, the Index is at its highest level for this time of year on record.
Looking at the Listings Index across individual capital cities shows some varied trends when we compare the current value to the value over the same week in previous years. The Index is lower relative to a year ago in Sydney (-8.9%) and Adelaide (-3.1%). In Melbourne, Brisbane, Hobart and Darwin the Index is at a record high for this time of year. In both Perth and Canberra the Index is at its highest level for this time of year since 2011. Based on this data we can expect over the coming weeks new listings to be higher than they were across most capital cities.
The listings data and Listings Index will be interesting to track over the coming weeks. The capital city housing markets were showing softer value growth conditions over the second half of 2015 however, early indicators for 2016 have showed a bit of a rebound in the CoreLogic Home Value Index and improved auction clearance rates. It is important to note that the indicators early in the year are based on a thinner number of sales so it will be important to track the trends as they are updated week to week.
What we do know is that the amount of properties listed for sale both in terms of new listings and total listings is high and it will be interesting to see how well these properties are absorbed by the market over the coming weeks and months. Particularly as auction volumes and buyer activity typically starts to pick-up between now and Easter.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him here.
