Residential property listings climbed by more than 3% during the month of February, driven by a wave of properties hitting the market in Sydney.
Figures released this week by SQM research show residential listings totalled 354,633 in February after a 3.4% month-on-month increase and were 0.8% higher than in February 2015.
Sydney easily led all capital city markets in terms of monthly and yearly increases, with its 25,698 listings over February 15.1% higher than January’s total and 18% higher than February 2015.
Melbourne saw listings rise 8.6% over February; however, its total of 36,406 is 5.6% lower than February 2015.
Hobart is the only other capital city where listings have dropped in the past year, recording a 6.8% fall, as a well as 0.7% decline over February.
Behind Sydney, Darwin
has home to the second largest year-on-year increase with listings up 12% in the year to February.
, Brisbane and Adelaide
all saw monthly and year-on-year increases in listings.
Source: SQM Research
Louis Christopher, head of SQM Research, said the end of summer usually brings about a rise in listings, but the changes seen in Sydney and Hobart represent shifting conditions in their markets.
“Listings normally rise at this time of year as the market fully opens up from the summer hiatus. The rise from Sydney however is well above normal seasonality and well above levels recorded this time last year,” Christopher said.
“This is evidence of a slower Sydney market where it is taking longer to sell. On the other hand, recording a decline at this time of year, as what has happened with Hobart, is also abnormal and is suggestive of a strong market made up of many buyers and fewer sellers,” he said.
Speaking to Your Investment Property Magazine, Rich Harvey, chief executive officer of propertybuyer.com.au, said there were likely multiple factors that had contributed to the increase in Sydney.
“A 15% increase over February is definitely interesting. There’s traditionally a bounce in listings at this time of the year, but that is higher than usual,” Harvey said.
“I’d say there are a few vendors who have wanted to get things done before Easter, so they’ve come to the market a bit earlier. I also think there’s probably a psychological aspect at play. People have seen how Sydney’s performed over recent years and now seeing it’s going to take a bit of time to sell they’ve come to the market earlier than they might have so they can try to lock in their profits,” he said.
While the numbers may be an out of the ordinary increase, Harvey said he believes the Sydney market, outside of some pockets, will absorb the increased offerings.
“I do think the market has the capacity to absorb it. There’s still strong demand from aspirational home buyers, those who want to upgrade or buy their first home. Sydney still has the strongest employment and economic conditions and that is helping with population growth as well.
“There might be some pockets, those suburbs that are over supplied with new units like Zetland and possibly Mascot, which might struggle a little bit. I’m also a little sceptical of Parramatta
, the number of new apartments and the prices they’re asking are a little worrying as well.
“If I was an investor, I’d be cautious of the new stock in those areas, I think we’ll see their prices flatline a bit and resale prices suffer.”
While Harvey believes the city at large can handle the increase in listings, he does believe the strong run the city’s auction market has had to start the year may fall off somewhat.
“The clearance rates over the last few weeks have been a bit higher than I was expecting, but they have been on lower volumes.
“Once we see volumes increase, I think we’ll see clearance rates settle at around 65% - 75%.”
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