In the doom and gloom of the property market, there’s a tiny glimmer of hope from CoreLogic’s latest data. For many property vendors desperately looking for a light from a lighthouse as they navigate the foaming waters of the real estate market, it’s no more than a candle. But it’s something.
Rate of decline slowing
CoreLogic’s October Chart Pack shows that while the housing market downswing is broader, the monthly rate of decline slowed to -1.4% in September, from -1.6% through August. What this means is that property values still fell as we entered spring, just but not as much as they did in the last month of winter. With the quota for skilled migration increased and overseas students returning, could this be the first sign of the decline bottoming out?
On the whole though, calm seas and brightly-lit lighthouses are few and far between for vendors if you look at the rest of the data.
Buyer demand slows
Sales volumes are trending lower as buyer demand slows. CoreLogic estimates that in the 12 months to September, there were 566,609 sales nationally, down -5.2% compared to the previous year. Buyers have not only had their borrowing power reduced thanks to higher interest rates and lender caution, they have a wait-an-see mindset – anticipating further falls in house prices.
Properties taking longer to sell
Fewer buyers means properties take longer to sell, and this is being seen at the national level. In the three months to September, the median days on market was 35, up from a recent low of 20 days over the three months to November 2021. As properties stay on the market longer, they become prime targets for vendor discounting.
Vendors are discounting more
Ms Owen says vendor discounting has increased from the recent low of -2.9% recorded in the three months to November last year. In the three months to September, the median vendor discount at the national level was -4.2%. News travels when vendors have to discount their properties, and this affects the number of potential vendors deciding to list their own home for sale.
Flow of listings is lower than average
And, indeed, the flow of new listings is lower than average. In the four weeks to October 2, there were 34,368 newly advertised dwellings listed for sale nationally. It may be up slightly compared to the month prior but CoreLogic’s head of residential research (Australia) Eliza Owen says the flow of new listings is -14.3% lower than the previous five-year average.
Auction clearance rate holding
The latest data did show that auctions are not doing too badly, possibly because home sellers have listened to advice to be realistic about price expectations. The combined capital cities clearance rate trended higher through September, averaging 59.8% in the five weeks to September 25th. While up from the average recorded over August (56.8%), it is down from 74.3% in the equivalent period of 2021 says CoreLogic.
(See our blog on How to Set a Reserve Price When Selling Your House)
Regional South Australia the outlier
One region is high and dry above the waterline. Regional South Australia has had a bumper year, with the highest annual growth rate in dwelling values among the regional and capital city dwelling markets at 22.2%.
Combined capital values down
The data shows the lowest rate of change in values was across Sydney, down -6.0% over the year. And, the rolling 28-day change in the combined capitals home value index fell a further -1.3% through the 28 days ending September 30th.
Interest rates about the only thing up
Not everything has gone down. As well as inflation, interest rates are still going up. The Reserve Bank of Australia lifted rates to 2.60% in October. Ms Owen says this takes the cash rate target slightly higher than the pre-COVID decade average, which was 2.55%.
Residz can help buyers and sellers reduce the stress:
- If you’re considering purchasing or renting a house, make sure you download our free property report for that address. We have 12 million addresses in our database, with every report offering information on internet speeds, crime trends, bushfire and flood risks, investability scores and a whole lot more.
- Would you like to sell your home and connect with home buyers willing to pay your dream price? Residz has the solution, for zero dollars. Put a DreamPrice on your home to test interest. Read about DreamPrice(™) here.
Also read our blogs: Avoid ever needing to ask ‘How does a bridging loan work?’ and Sydney auctions a 50-50 chance of success – unless sellers take off prior.Photo by Nathan Jennings on Unsplash