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Monday, 16 July 2018

All hat and no cattle

Stock and flow

A quick shout-out to SQM Research and its excellent range of data series! 

As the Royal Commission approaches its interim report, fewer vendors are listing their homes and investment properties for sale in Sydney. 

The number of new listings for this time of year is now tracking at the lowest level since 2013. 

However, those properties already on the market are taking longer to sell.

And so total number of listings is at the highest level in Sydney since 2012 (while acknowledging that the population of Greater Sydney has swelled by about ½ million since that time, depending upon where you draw the boundaries). 

It's bittersweet to read these statistics as a property buyer. 

In the suburbs where we normally buy houses such as Bondi Junction I take a sideways glance at the online listings to find that there are - wait for it - a grand total of three houses to choose from (including a tiny 2-bedroom cottage, and a house on the modern day car park that is Bondi Road). 

Family-appropriate houses: one. 

If you look with a magnifying glass, you might just be able to make out an increase in the number of eastern suburbs houses listed for sale.


Source: SQM Research

How then, are total Sydney listings at the highest level since 2012?

Well, the answer lies in the fringe areas of Western Sydney and South Western Sydney where stock is taking time to shift.

Of course, most new houses are built on the fringe and therefore a total increase in stock listings is not entirely unexpected, but it's clear from auction clearance rates that the inner west, northern beaches, and lower north shore (about 80 per cent this weekend) are faring much better than some of these secondary locations.

Godspeed to these vendors!

'Gliding smoothly to a soft landing'?

According to CoreLogic, Sydney's longest and greatest peak-to-trough decline in dwelling prices across four decades of figures was 11.6 per cent through an ultimately recessionary 28-month period spanning from 1988 to 1991.

Extremely high mortgage rates followed by a recession proved to be a tough combination for the Sydney housing market to deal with at that time. 

Over the past 12 months the median dwelling price in Sydney has declined by 4.9 per cent, on a shallower trajectory than 3 of the past 7 downturns, though of course individual experiences will differ.

The traditional spring selling season approaches in the coming months.