New listings slump
Listings declined in Sydney and Melbourne August as vendors quickly lost confidence in the strength of the property market after the Federal Budget.
Total listings had been piling up until July, and remain significantly higher over the year across most capital city property markets.
Asking prices as lead indicator
It's always interesting to take a look at SQM's asking prices indices as a potential leading indicator for what's to come.
Generally speaking, the sharper 10-to-15 per cent price declines in this cycle to date have come mostly from the top price quartile of the market (and, so far anyway, much less so from the middle and bottom price quartiles).
Looking at asking prices, houses in Sydney have been the most impacted property type in this cycle, as the most interest rate sensitive sub-sector of the market - particularly in the expensive Eastern Suburbs, for example, where the median asking price for a house sits above $3 million these days.
Although there are some excitable forecasts annualising recent price declines - leading to forecasts for total median price declines for Sydney of close to 20 per cent - asking prices seem to have levelled out over the past month (and even increased a little over the past week).
Historically speaking, the steepest price declines have tended to occur mid-downturn as initially stubborn vendors capitulate to meet the market and accept lower prices.
Now, to be fair, another interest rate hike or two might easily kick off further round of price declines as sentiment and borrowing capacity take a renewed hit.
Unit prices in Sydney have generally underperformed since the 2018 overbuild, and as such haven't declined too much this year at all.
In Melbourne, asking prices for houses are now slightly higher over the past month, having initially corrected by about -5 per cent earlier in the year.
Meanwhile unit prices appear to be pushing for new highs, perhaps underpinned by the huge and ongoing increase in residential construction costs, as well as relatively attractive prices and higher rental yields in some cases.
Nationally, asking prices have also been flat for the past month for houses, and have increased marginally for units.
Source: SQM Research
Overall, it seems that some homebuyers are now prepared to pay for the right property, but investors have stepped out of the established housing market almost entirely for the time being.
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