Sydney’s house price rebound could slow in the coming months amid signs new listings are ramping up, at a time when buyer sentiment seems to be weakening, experts say.
Fresh stock rose by 5914 in the four weeks to July 9, which is 10.8 per cent higher than the five-year average and 1.4 per cent more than a year ago, data from CoreLogic shows.
New listings rose above the five-year average across Sydney, slowing the recent rapid price growth. Fairfax Media
The rise in new listings came earlier than normal, which could signal a shift in the overall supply levels, said Tim Lawless, CoreLogic research director.
“We’re seeing a bit of a lift in new listings, which is out of season or countercyclical. This is a really important trend to watch,” Mr Lawless said.
“We don’t normally see listings starting to rise until mid-August to early September, so this is a pretty new trend we’re seeing at the moment. It could be the start of more supply coming to the marketplace.
“One of the things we’ve always been watchful of through this period of growth is the supply side and as I’ve said in the past, a seasonal rise in new listings could take some heat out of the marketplace because it helps to rebalance the supply and demand equation.”
Thomas McGlynn, Sydney-based real estate agent and chief executive of BresicWhitney said the level of fresh stock could jump even higher in the coming months as properties already scheduled to sell but not yet listed, come online.
“We have tripled our transactional volume with 164 properties signed in June alone, compared to the previous year and that has continued to flow through into July where we’re tracking to double our historical listing volume. I’m quite sure other agents are also seeing the same trend,” Mr McGlynn said.
“These properties are yet to hit the listings sites, so I think we’re going to see more stock in spring than we’ve seen in the past 12 months.
“I think that that’s not an indicator that we’re going to see a dramatic price drop but easing of the rapid price increases that we’ve seen recently.”
The increase in new stock was fairly broad-based but was more pronounced in the country’s biggest housing markets, CoreLogic data shows.
In the past four weeks, new listings jumped by 8.7 per cent in Sydney, they increased by 9.7 per cent in Melbourne, they were up by 11.4 per cent in Brisbane, by 10.9 per cent in Adelaide and by 8.7 per cent in Perth.
While new listings in the combined capital cities are still below the five-year average, the gap is narrowing, according to Mr Lawless.
“I think more vendors are realising now is a good time to sell. This could also be a sign that we’re starting to see more home owners simply not able to continue to hold their property in the face of really high interest rates and high cost-of-living pressures,” Mr Lawless said.
“So we could be on the cusp of a change in the market where we do start to see more supply available to buyers. And even though we’re seeing the fundamentals of demand still very strong in the sense that population growth is very high, you wouldn’t think there’s going to be a commensurate demand response if we start to see listings rise.
“So I would flag this as being a bit of a cautionary point in the marketplace where we could be seeing stock levels becoming higher and potentially starting to normalise, taking away one of those underlying fundamentals of price growth.”
Buyer sentiment has worsened in June with home buying spending intentions declining by 26.2 per cent over the month, and down 28.8 per cent over the year, led lower by a fall in home loan applications according to CBA.
This coincided with the slowdown in the pace of house price growth across most capital cities last month.
CoreLogic’s daily index shows home values slowed further in the past four weeks.
Sydney decelerated from 1.8 per cent in early July to 1.5 per cent. Melbourne slowed from 1 per cent to 0.6 per cent, Brisbane from 1.5 per cent to 1.2 per cent, Adelaide from 1.1 per cent to 0.7 per cent and Perth from 1.3 per cent to 0.7 per cent.
“Based on the high-frequency reading, it looks like some momentum is leaving the pace of growth in housing values, continuing the decelerating trend of growth we saw through June,” Mr Lawless said.
Shane Oliver, AMP chief economist said it was possible the growth rate for house prices had peaked.
“The lift in listings and the recent slowdown in price growth could be a sign that we’ve seen the peak growth rate for this mini rebound,” said Dr Oliver.
“It is quite possible that we’re seeing more evidence that interest rates are starting to get the upper hand again after a period of several months where the underlying supply shortfall was the dominant driver.
“The rapid interest rate rises are starting to push more people over the edge in terms of mortgage stress, inducing them to sell their property to avoid problems down the track.”
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