SQM Research: Sydney housing stock on the market plunges by 23% as asking prices rise 7% in a year; Sydney stock levels approach four-year lows. National stock levels down 5%.
The number of Sydney properties listed for sale has fallen by almost a quarter in the space of a year with stock levels approaching four-year lows, according to new figures for June compiled by SQM Research.
There were 23,707 properties listed for sale in Sydney in June, 14.6% less than in May (27,761) and 23.1% less than the more than 30,000 properties listed for sale the same time last year.
All capital cities recorded expected declines in residential stock in line with the winter slowdown, but Sydney was the only capital city to record a double digit monthly decline and larger annual fall.
A lack of listings could put further pressure on Sydney property prices given the impetus to buy due to low interest rates.
"We're not quite there yet in terms of stock on market, but we are approaching that period of late 2009, early 2010 when Sydney real estate prices were growing at an annual rate of around 15%," SQM Research director Louis Christopher tells Property Observer.
"Vendors are now increasingly in control of the market and this will put upward pressure on real estate prices.
In September last year, SQM Resarch forecast growth in Sydney house prices in 2013 of between 5% to 9%.
"We are approaching the upper point of that range and 2014 could be a year when capital growth is even higher than that," says Christopher.
He attributes to the large drop in Sydney listings to not a lot of new listings coming to market as well as old stock now being absorbed because prices are rising to meet vendors' expectations.
According to the SQM Research Asking Price Index, asking prices for Sydney houses have risen 7.3% over the past 12 months to June 30 while asking prices for units are up 5.8%.
RP Data-Rismark records a 6.3% rise in Sydney house prices over the past 12 months.
BIS Shrapnel expects Sydney to be the strongest housing market over the next three years with a 19% gain.
Whilere there are less than 24,000 Sydney properties now listed for sale, Melbourne has nearly double the number of properties for sale, more than 46,000 properties for sale, while the much smaller Brisbane market also has more properties listed for sale than Sydney with just under 27,000.
“I believe that overall, the national housing market still remains well supplied with current listings, however Sydney is turning out to be a clear exception,” says Christopher.
“When you consider the long term chart, Sydney is approaching the 2009 lows and this fits with other measurements indicating a strengthening housing market for that capital city.”
Behind Sydney, the next biggest monthly decline was Canberra (down 8.3%) while the biggest annual decline was Melbourne (down 8.7%) followed closely by Perth (8%).
Nationally the level of residential property fell by 5.3% over June to a total of 358,882.
Year on year, residential listings are down 5.4%.
“Whilst the majority of capital city monthly decreases can be attributed to seasonal influences and the fact that we came through five weekends in May to four weekends during June, Sydney’s monthly decline of -14.6% in stock appears to have gone beyond these attributes, as we begin to witness stock levels for this capital city that match those seen in 2009,” says SQM Research in its analysis of the data.
“This being the case - combined with Sydney recording a -23.1% yearly decrease in stock, SQM Research believes that we may now be approaching a point where there is a shortage of residential sale listings in the Sydney Market.”
Judging by the rising rental vacancies in Sydney it would appear that investors are buying a larger percentage of properties and converting them to rentals.
Melbourne has twice Sydney's housing stock for sale, what's going on there? Massive glut in Melbourne = prices to fall?
Even Brisbane has more homes for sale than Sydney!
Sydney has a severe undersupply problem, and the oversupply in Melbourne is going fast.
Elastic
4 Jul 2013, 01:09 PM
Judging by the rising rental vacancies in Sydney it would appear that investors are buying a larger percentage of properties and converting them to rentals.
What happens is renters buy homes which reduces the number of homes on the market and increases the number of homes available for rent, and it tends to lower rents slightly as landlords compete for tenants.
Sydney has a severe undersupply problem, and the oversupply in Melbourne is going fast. What happens is renters buy homes which reduces the number of homes on the market and increases the number of homes available for rent, and it tends to lower rents slightly as landlords compete for tenants.
Good point Peter, that is also a possibility but given that FHB numbers are so low in Sydney atm it is probably due to investors. In Perth, on the other hand, your mechanism would be correct.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
Sydney’s poor planning has played a large part in this. They have made steps to reform it. But it will surely affect the states economy. I wish they would stop using Sydney as an indicator for rallying in national housing prices. It’s interesting that both Hobart and Brisbane had a similar amount of contraction, yet prices in Hobart have gone negative. I maybe that vendors have giving up on real estate agents and are bunkering down. It maybe that simple. I think an interesting trend may be seen in the growth or contraction real estate agencies.
According to this site, volume has seen a 2% increase:
I take it the above is fairly accurate? Perhaps there is a lag due to settlement, but it is relatively flat. I’m really surprised that this isn’t been talked about.
Melbourne has twice Sydney's housing stock for sale, what's going on there? Massive glut in Melbourne = prices to fall?
Even Brisbane has more homes for sale than Sydney!
Melbourne did have 76,000 properties on market on 2012 so a 30,000 reduction is a good result. A lot of affordable houses in Melbourne, one of the better places to buy in Australia at present in my opinion.
Melbourne had a large construction boom over recent years, mostly fuelled by strong immigration and population growth. When Gillard can the idea of a big Australia immigration numbers feel greatly, so projected demand for housing fell in Melbourne as a good portion of the current migration goes to Perth. That has now been relaxed so Melbourne is picking up again. It was also hang over affects from the GFC, Melbourne was building a lot of houses, mostly out west and north.
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