Find out why you should keep an eye on advertised housing stock
One of the most important indicators in the housing market is how many homes are being advertised for sale. Rising inventory levels generally imply a lower rate of absorption or sale in the market, meaning more homes are being added to the market than are selling. On the flipside, when listing numbers are reducing it generally means a strong selling environment.
Stock levels are currently rising across Australia, in fact the number of homes advertised for sale has been trending higher since spring last year, which is seasonally normal, however stock levels during March 2016 have risen to their highest level since December 2012. Nationally, CoreLogic is tracking approximately 268,000 homes that have been advertised for sale; 8% higher than at the same time last year.
Across the capital cities the jump in the number of homes available for sale has been more pronounced, with listing numbers 12% higher than a year ago.
The rise in advertised housing stock has been most evident in Perth and Darwin where housing market conditions peaked during 2014. Compared with two years ago, listing numbers in Darwin have increased by just over 50% and in Perth listing numbers are slightly more than a third higher than they were two years prior.
More recently, however, listing numbers have started to rise in markets that have been showing very strong conditions. Sydney listing numbers are now 18% higher than a year ago; and importantly, this rise in advertised stock levels is coming at a time when the number of newly advertised properties is slowing.
Listing numbers have also jumped in Brisbane (+17% on last year) and Adelaide (+21% on last year) however these rises have been fuelled by a surge in the number of newly advertised properties rather than a jump in re-listings.
Higher supply levels is likely to benefit buyers but challenge sellers. Buyers now have more housing stock to choose from which means they can take their time to make a purchase decision with less risk the home will be sold to someone else. Buyers can negotiate harder and if they don’t get the price they feel represents fair value, they can move onto another property. These are very different conditions to a year ago when stock levels were lower and buyers were competing much more fiercely for the available stock. For sellers it means they may need to adjust their price expectations and marketing strategy.
Of course, housing market conditions and supply levels are very different from region to region, so it always helps to consult an expert! Your Aussie Mortgage Broker can give you CoreLogic property and suburb reports to share insight into what’s happening in the area/s you’re looking to sell or buy in.
Do you keep an eye on market data? What else do you think reveals market health?