The undersupply of property listings for sale is continuing to fire up property markets, with some areas having the lowest supply levels for decades.
While interest rates are a headwind for some potential buyers, the lack of stock for sale is driving competition and pushing prices higher.
The CoreLogic’s national Home Value Index recorded a third consecutive monthly rise, with the pace of growth accelerating to 1.2 per cent in May.
After finding a floor in February, home values increased 0.6 per cent and 0.5 per cent through March and April respectively.
Sydney continues to lead the recovery trend, posting a 1.8 per cent lift in values over the month, recording the city’s highest monthly gain since September 2021, according to CoreLogic.
Brisbane (up 1.4 per cent) and Perth (up 1.3 per cent) were the only other capitals to record a monthly gain of more than one per cent over the period, however, the rise in values was broad-based with the rate of growth accelerating across every capital city last month.
CoreLogic’s Research Director, Tim Lawless, says these positive trends are a symptom of persistently low levels of available housing supply running up against rising housing demand.
“Advertised listings trended lower through May with roughly 1,800 fewer capital city homes advertised for sale relative to the end of April. Inventory levels are -15.3 per cent lower than they were at the same time last year and -24.4 per cent below the previous five-year average for this time of year,” he said.“With such a short supply of available housing stock, buyers are becoming more competitive and there’s an element of FOMO creeping into the market. Amid increased competition, auction clearance rates have trended higher, holding at 70 per cent or above over the past three weeks. For private treaty sales, homes are selling faster and with less vendor discounting.”
With hundreds of thousands of overseas migrants set to settle on our shores over the next two years, this supply shortage will underpin property market performance for some time to come.
According to SQM Research, the supply of listings for sale nationally are as low as they were in mid-2021, with some cities experiencing significant drops in the supply of listings. This is particularly the case in Perth where the volume of for sale listings has hit the lowest level since 2010, which is one of the reasons why we are seeing such strong market conditions in the Western Australia capital.
Likewise, in Adelaide, where total property listings have been at decade lows since the start of last year.
At the coalface, we are helping investors purchase into locations that have been identified as areas primed for strong cash flow and future capital growth while also often having affordable buy-in prices.
The old saying that the best time to purchase property was yesterday or today is never truer that it is right now, with a variety of market metrics posting improvements each passing month.
Plus, it certainly does appear that there are many property buyers who have made peace with the interest rate environment and have decided they need to get off the sidelines and into the game before prices run away from them once again.