With auction clearance rates down, and the number of property sales across the board also in significant decline, it may take as long as eight months to clear housing stock on the market today.
RP Data’s Property Pulse has reported that housing stock is piling up, with 7.4 months of effective supply on the market.
Research analyst Cameron Kusher said that while the number of property sales remain around the same level as last year, there are a larger number of properties on the market and this larger number is not matched by the number of property buyers.
“A spike in recent property listings data acquired by RP Data suggests that available stock is at near-to record levels and is being driven by unsold properties re-listed while new properties continue to enter the market. This result is indicative of slower market conditions and longer than normal selling periods,” Kusher said.
Kusher suggested that housing stock levels may have reached peak levels in some capital cities, though housing stock continued to grow in Melbourne and Adelaide. He said that, while he expects the recent RBA rate cut to see increase in demand fro quality properties and potential better sales volumes.
“My reasoning behind this is because while demand for home loans is fairly flat, consumers show low levels of optimism when it comes to property purchases and retail trade continues to be slow, at a macro level the property market is likely to be subdued until we see a significant reduction in the number of homes for sale,” Kusher said.
Once rates start moving down more and demand for home loans improves, so should property sales.