Property listings are down across Australia, with new listings at their lowest level in 12 years. While much of the downturn can be attributed to the sharp drop in prices felt across the country, the recent Federal election and struggling employment and wages figures are also having an impact. While this sharp downturn could be seen as bad news, other indicators point towards a bottoming market as things start to slowly turn around. The recent move by the RBA to cut interest rates has created some positivity, with changes to lending rules by the banking regulator APRA also shifting mood for the better.
According to data from CoreLogic, Sydney and Melbourne have experienced the biggest slowdown, with listings 30 per cent lower than the recent peak. National listings were also down 20 per cent over the same time period, with Brisbane, Canberra and Perth all seeing reduced activity. Of all the state capitals, only Adelaide, Hobart, and Darwin managed more listings over the past year. The situation has become so bad that stamp duty revenue is starting to dry up and undermine the government's budget positions.
The CoreLogic downturn was mirrored in Westpac's latest Housing Pulse research, although at a much lesser extent. According to the report, new listings are running at 37,000, which is well below the historical monthly average of 40,000. According to Westpac, the ratio of sales to new listings, and the total listings expressed as months of sales, both suggest the market has weakened to levels not seen in seven years. Current sales are sitting in the 0.90-0.92 range, which means they're only absorbing about 90 per cent of all new listings. Weak sales figures are responsible for this historic low according to Westpac, with property sales currently sitting at a 28 year low.
According to Westpac, however, "a very interesting contrast is unfolding." While the situation on the ground is undeniably pessimistic for sellers, buyers are in a great position and the market itself is showing some signs of life. This is especially true for houses, where both new and total listings are running close to long run averages relative to sales. The situation is very different for apartments, however, where new listings have been outstripping sales for about two and a half years, and total listings have risen well above average relative to sales.
Domain economist Trent Wiltshire is one of many experts who thinks the market is starting to stabilise: "Buyers are a bit more interested in buying, even just a few weeks post the election, so there's been a bit of a turnaround," he recently said in an interview with 7.30, adding "In the early part of 2019 we did see sales volumes fall to their lowest level in at least two decades... But I don't see a big turnaround happening, maybe just prices bottoming out, then pretty steady prices for the next year or so."
According to Wiltshire, "It's a bit of a self-fulfilling prophecy, that people see prices falling and delay a purchase, and on the other side sellers are very averse to making a loss." With the current market still very much in a slump, most sellers are happy to wait it out until the situation improves on the ground. With the Australian property market in such a long-term growth pattern, and interest rates at a historic low, many people see the current downturn as short-acting and somewhat self-limiting.