Residential listings go against the trend

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AN unseasonable rise in residential property listings during July pushed Melbourne and Sydney to annual increases of nearly 21% and 11% respectively.

Data from SQM Research showed national listings increased over the month by 3.8%. Compared to 12 months ago, listings were down by 1.2%. New listings grew by 18.3%.

Nearly all capital cities experienced increases in July, except for Darwin with a 1.4% decrease.

The largest increase was in Sydney at 8.7%, to 32,165, followed by Canberra with 6.4% to 4,166.

Melbourne (39,494) and Brisbane (30,500) both recorded a 5.9% increase. Adelaide (15,108) and Perth (22,525) experienced smaller increases of 2.4% and 3.2% respectively.

Year-on-year listings show more significant increases. Sydney was up 10.7% and Melbourne 20.7%. All other capital cities recorded declines over 12 months, led by Darwin with a fall of 21.4% and Hobart with 10.0%.

“It is somewhat abnormal to record a rise in listings during the winter months. Normally, falls are recorded. This could have been generated by the lifting in restrictions over May and June, enticing sellers to the market,” Louis Christopher, managing director of SQM Research said.

“The year on year results for Sydney and Melbourne tell the story with significant rises, particularly for Melbourne. Such a reading normally is associated with a weakening market and no question, this is what is occurring in our two largest cities. Dwelling prices are falling. Not crashing to date, per se. But in light of the unprecedented restrictions placed in Melbourne, our expectations are that more prices falls in can be expected in coming months.”

“Outside the two capital cities, the market is more balanced and indeed we are seeing an increase in demand for housing across regional Australia.”

CoreLogic’s latest home value index showed Melbourne (down 1.2%) and Sydney (down 0.9%) led the decline in house prices during July. AMP Capital is now expecting a 15-20% decline in Melbourne, partly reflecting the bigger hit to its economy from its ongoing lockdown, and for Sydney prices to see a 10-15% drop.

Ben Udy, Capital Economics’ Australia & New Zealand economist, lower supply should help limit the decline in prices in the near term. However, urgent sales may become more common as fiscal support tapers from October and repayment holidays expire at the end of March next year.

SQM Research figures showed Sydney, Melbourne, Adelaide and Hobart all recorded marginal asking price decreases in both houses and units during July.

Canberra’s asking prices for units increased by 0.6%, as did Darwin with a 1.0% increase, while house asking prices fell slightly.

Brisbane was the only capital city to record increases in house prices, of 0.3%. Perth’s unit prices slipped by 0.1% and house prices were stable.

Year on year, most capital cities saw notable house and unit asking price increases, with the exception of Darwin (down 3.1% and 2.2% respectively). Sydney and Melbourne both recorded 9.0% increases for house prices, while Hobart saw rises of 11.5% for house asking prices and 21.7% for units.

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