Property market braces for spring leap in listings
The housing drought is breaking, with more homes flowing on to the market as spring heats up and key cities cool after the prolonged boom and a crackdown on investor lending.
In Sydney, the country’s hottest market for the past five years, listings are growing, but not enough to cause a flood or pull prices down dramatically, according to Ray White chairman Brian White. “One of the best litmus tests of market change is a surge in listings. We are seeing adequate listings, but no surge for spring, ” he said.
Chairman of agency Century 21, Charles Tarbey, said there had been a “modest” rise in stock but this was expected to increase over the next few weeks. “The market (in Sydney) is starting to weaken. Auction clearance rates in Sydney were 70 per cent last weekend; they were 80 per cent a year ago,” Mr Tarbey said.
The withdrawal of investors in the wake of banking restrictions and higher mortgage rates, the slowdown in Chinese investment and Sydney’s unaffordability after price growth of 75 per cent since 2012 have taken the heat out of the city’s housing market.
Sydney’s seemingly unstoppable prices were flat over the past three months while Melbourne values lifted nearly 2 per cent, researcher CoreLogic found. Price growth in Brisbane continued to be static, while in Perth values fell 1.6 per cent for the three months to the end of August.
In Sydney, the number of homes advertised for sale increased 5 per cent in August compared with the previous month and was up 12.4 per cent compared with August 2016, SQM Research found. In the resilient Melbourne market, listings rose 3 per cent for August but fell 15.3 per cent compared with a year ago.
“Looking ahead, we can expect to see a big boost to listings in September with the advent of the spring selling season,” SQM wrote in a research note.
The return of first-home buyers after the Victorian and NSW governments brought back first-home owner grants would underpin demand and prices, the researcher said.
“We’ve seen a strong monthly rise in listings in Sydney, Canberra and Melbourne, with some buyers
deciding to take profits on their properties with price gains being posted in all of those cities.”
John Normyle is selling his home in Sydney’s inner-city Paddington after seven years to take advantage of the strong price growth and to downsize.
“The kids have grown up and I would like to get rid of the mortgage and stay in Paddington,” the architect said.
Mr Normyle, whose grandfather owned a pub in the trendy suburb and has been a local since the 1970s, said prices in Paddington tended to surge and then go through flat periods, rather than fall, always underpinned by the area’s proximity to the city.
Comparable sales in Paddington ranged from $1.75 million to just over $2m, according to Ray White Double Bay agent Kim Haye, who listed the home and noted stock levels were still low in the area coming into spring.