The amount of stock available in the residential property market has increased by 29.7% in the year to May, and by 50% in Melbourne alone, according to new figures released by SQM Research, although listings have decreased slightly since May.
The data bolsters the viewpoint the property market is saturated with listings which are set to drive down prices this year, experts warn, with some analysts warning declines could be as much as 10%.
The new SQM figures shows listings fell by 1,149 to 369,489 across the country, representing a decrease of 0.3%.
However, SQM chief Louis Christopher says the result should be expected given winter has started and the amount of listings will fall on a seasonal basis.
“Year-on-year results have actually declined from April, and that was to be expected. But what’s happened is that seasonally, there was a slight decline in total listings, some cities still recorded increases, and some cities recorded marginal declines.”
“What is more noteworthy is that year-on-year, we are still seeing an extensive increase – comparatively speaking, the amount of stock on market is still on the rise,” he said.
Christopher says there is a chance that stock levels may be finally peaking, but more data needs to be seen before that can be confirmed.
“We’ve always said the decline on house prices will be mid to high single digits, and we still hold to that because there is still weakness in demand side, but what this means is that if listings do peak, we will unlikely see falls in the capital cities in the double digits.”
“But for the capital cities, the likely scenario is seeing drops in the mid to high capital cities.”
The amount of properties now available for purchase is up by a massive 29.7% when compared to the same time last year.
In Melbourne, stock levels have increased by a massive 49.6% when compared to last year, with 32,753 houses and 10,867 units listed, while in Darwin stock has increased by 59.3%, although there are only 3,140 houses and 530 unites available.
Canberra stock has risen by 44.6%, Adelaide by 42.4%, Perth by 37.1%, Brisbane by 30.4% and Sydney by 25.5%. Hobart stock has risen by 35.7% across the year.
The biggest monthly falls were in Sydney, where listings fell by 3.5% over the month, while Brisbane and Perth recorded declines of 1.3% and 0.6% respectively. Stock in Melbourne was flat, rising by 0.2%, while Canberra listings recorded 0% growth.
The biggest increases were in Hobart and Darwin, up by 3.5% and 3.6% respectively, with Adelaide listings up by 1.5%.
Overall, Christopher says the 29.7% yearly increase is “humble… but still a vast surge in listings”.
“What is more noteworthy is that year-on-year, we are still seeing an extensive increase – comparatively speaking, the amount of stock on market is still on the rise.”
Some experts believe the sheer amount of stock on the market, driven in part by a rise in construction in some areas, along with a higher amount of sellers looking to capitalise on recent gains, will actually drop prices by as much as 10% in some areas this year.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
