Sellers continue to benefit from current conditions in Australia, as home sales continue to exceed new listings, according to CoreLogic.
The sales / new listings ratio reached 1.4 in the three months leading up to July, suggesting strong selling conditions.
This means that for every home added to the market, more than one is sold.
The ratio has moved above one since June 2020 when HomeBuilder was first announced.
To put this into perspective, the sales to new listings ratio has averaged 0.9 over the past decade, making the recent figure a significant indicator of a sellers market.
All capitals recorded a sales-to-listings ratio greater than one, with Adelaide posting the highest at two.
Cities that imposed closures in July saw an increase in the ratio, but this could be due to the postponement of some vendors.
Eliza Owen, head of residential research at CoreLogic, said the seller's market is being driven by rising demand for housing, which is being influenced by several factors, including low mortgage rates, an increase in home equity. 39; savings and greater activity of early buyers and investors.
Low mortgage rates fuel demand
Data from the Reserve Bank of Australia showed that even with fears of a possible rise in mortgage rates, homeowner mortgage rates fell another 12 basis points during the first semester.
"Mortgage rates are one of the most important determinants of housing demand, and in the current climate, where GDP is expected to decline again, the RBA will likely facilitate a low rate environment for longer" , Ms. Owen said.
Savings Boost
Households are also more confident in spending on housing due to the savings windfall, which has been driven by lower consumption amid closures and government financial support.
In fact, household savings peaked at 22% of household income during the second quarter of the year, which is significantly above the 10-year average of 7%.
"Combined with a range of home buying incentives introduced through 2020, increasing savings levels may have bolstered borrower deposit levels , triggering additional sales since the onset of COVID-19, ”Ms. Owen said.
Increased activity of first buyers, investors
First-time home buyers and other state subsidies have encouraged more first-time buyers to enter the housing market.
Ms. Owen said that engaging first-time homebuyers in the market provides insight into the dynamics of supply and demand.
"The activity of first-time home buyers creates additional housing demand without adding any new stock advertised to the market," she said.
At the start of the year, the number of first-time home loans peaked at 16,260. This was almost double the series average for monthly loans for home purchase. 39; first housing guaranteed at 8,731.
As segment engagements started to decline, they remained 58.8% above the series average until June.
Investor activity has also seen an upward trend since mid-2020. Since then, however, funding commitments from investors have increased.
There were 18,625 guaranteed home loans for the purchase of real estate by investors up to June, which is a 74.8% increase over commitments for the same month of 2020.
Tight listings for houses
Blockages and mobility restrictions have continually dampened announcements over the past year.
In recent months, however, there were already signs of a recovery. CoreLogic data showed that approximately 38,000 new listings were added to the market in the four weeks leading up to July 4, 2021, which is above the five-year average.
However, recent closures in several parts of the country have hampered this progress. Sydney, for example, has seen a 17.3% drop in new listings over the past four weeks.
Ms. Owen said that helping homeowners in the form of mortgage deferrals helped keep distressed sales from reaching the market, which is also a factor why registrations are low.
“This has also contributed to the persistence of the seller's market, which is reflected in the high ratio of sales to new listings,” she said.
Will the seller's market persist?
Sellers should take advantage of favorable conditions now before it is too late.
The recent CoreLogic Hedonic Home Value Index showed that the rate of increase in property prices is starting to moderate in capital cities. This could indicate that the heat has started to come out of the housing market.
"The ratio may ease in the coming months as the advertised supply shifts during the normal seasonal spring rise and buyer demand is constrained by prolonged lockdowns and market constraints. Affordability, ”Ms. Owen said.
