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Stock on market above normal April levels, house prices stagnating - SQM Research; Mining downturn is affecting the Perth and Darwin housing markets
Topic Started: 5 May 2014, 08:43 PM (7,431 Views)
Jimbo
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peter fraser
11 Aug 2014, 09:35 PM
Not in my experience. I disagree completely. When prices are rising potential vendors who don't have to sell hold on to see how high the price might go.

When prices fall there is a rush for the exit.

Consider this graph of Sydney -
http://www.sqmresearch.com.au/graph_stock_on_market.php?region=nsw%3A%3ASydney&type=c&t=1

You can see the huge number of properties listed at the onset of the GFC suddenly falling as prices boomed in 2009 and levels peaking again in 2011 and 2012 as the market cooled and prices fell, only to see stock levels fall away again as the current boom took hold.

I would pay more attention to Louis Christophers opinion if I were you.
Higher listing numbers only equal a crash if there are fewer buyers than sellers. To draw a conclusion that fewer listings alone equals rising prices is flawed logic.

There are two sides to the supply demand equation. There always has been and there always will be.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Gossamer
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Jimbo
11 Aug 2014, 09:49 PM
Higher listing numbers only equal a crash if there are fewer buyers than sellers. To draw a conclusion that fewer listings alone equals rising prices is flawed logic.

There are two sides to the supply demand equation. There always has been and there always will be.
Well said.
Common sense is a curse - those who have it need to suffer dealing with those who don't have it.

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Nelson
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peter fraser
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Jimbo
11 Aug 2014, 09:49 PM
Higher listing numbers only equal a crash if there are fewer buyers than sellers. To draw a conclusion that fewer listings alone equals rising prices is flawed logic.

There are two sides to the supply demand equation. There always has been and there always will be.
Crash? Who was talking about a crash? I've never actually seen a wide spread housing market crash in Australia, but I've seen many corrections.

Yes buyers evaporate at the same time that vendors suddenly appear. Prices don't change much apart from isolated bargains. That suits investors buying but not so much home buyers. Can't ever seem to get the property that you want where you want it when you want it.
Edited by peter fraser, 11 Aug 2014, 10:05 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Jimbo
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peter fraser
11 Aug 2014, 10:04 PM
Crash? Who was talking about a crash?
Fair enough you never said crash.

I have personal experience of more than just the Australian property market and the articles conclusion that low supply automatically equals higher demand is just an assumption.

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Jimbo
11 Aug 2014, 10:42 PM
Fair enough you never said crash.

I have personal experience of more than just the Australian property market and the articles conclusion that low supply automatically equals higher demand is just an assumption.
Yes it is an assumption, but a good assumption based on history and facts. Go and compare SQM's capital city and or national stock on market number charts and you will find a reasonable correlation between rises and falls in listings and changes in prices. Its not perfect but its still quite good.

There is also a good correlation when looking back between listing movements and sales.
So while, yes, there maybe other reasons for upward and downward movements, fact, history and overall logic suggests the main causation given in the media release is the best likely scenario.

Perhaps for the sake of total completeness, SQM should list all the possible scenarios but that would probably confuse many readers and would require more than just a one page media release.

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Elastic
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There is also a correlation between stock on market and vacancy rates.
If anyone remembers Burbwatch, he used to have graphs showing this relationship which is clearly seen at the city level.
It is somewhat complicated by population growth and construction rates but generally vacancy rates rise when the stock on market is falling. It is also very noticeable around the Christmas period.
Only a rat can win a rat race.

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