Old listings rose sharply in Sydney and Melbourne last month as vendors struggled to find a buyer within a reasonable timeframe amid falling demand, data from SQM Research shows.
The number of Sydney homes on the market for six months or longer surged by 9.6 per cent to 4032 in May, and in Melbourne by 6.2 per cent to 6378. The build-up in older listings will put further pressure on prices as the housing market moves into a correction.
Nationally, there are 49,813 homes languishing on the market for at least 180 days.
SQM Research managing director Louis Christopher said the number of older listings would increase as interest rates rose and fewer buyers could enter the market.
“Older stock levels are likely to increase from here because there’s a wide gap between buyers and sellers at the moment,” he said.
“There are fewer buyers compared to available stock, which means older stock is piling up, and it’s taking longer to sell property.”
In Sydney’s inner west, the number of homes on the market for at least six months jumped by 18.6 per cent. In the eastern suburbs it climbed by 11.4 per cent and on the northern beaches by 24 per cent. Old stock in inner east Melbourne rose by 5 per cent and in the city’s north-west by 11 per cent.
In Perth, old stock levels rose 3.4 per cent to 4032. In Canberra, they went up by 4.8 per cent to 219 and in Hobart by 13.3 per cent to 213. The number lifted slightly in Adelaide and Darwin but dropped by 5.5 per cent in Brisbane.
“This straight away indicates that a large number of properties are increasingly struggling to sell within a reasonable timeframe,” Mr Christopher said.
“A rise in old listings is normally suggestive of impending slower market conditions, and we’ve seen this occur every market slowdown.”
Although new listings fell sharply across the country last month as vendors held off before the federal election, new stock levels were set to rise in the coming months, Mr Christopher said.
“In the month following an election, there’s generally a bounce in new listing activity, and I think we’re getting that,” he said.
“I expect to see a jump in new listings from here onwards, even as we have now reached the quieter winter months. SQM Research has recorded a surge in new auction listings, hence why we have this view.”
Last month, listings less than 30 days old fell by 4.8 per cent in Sydney, by 6.7 per cent in Melbourne and by 10.6 per cent in Canberra. Hobart had a 28.2 per cent slump, in Darwin it was 8 per cent and Brisbane fell 0.7 per cent. Nationally, new stock fell 5.9 per cent.
Despite the weaker selling conditions, vendors were far from being forced to sell, Mr Christopher said.
“Sellers or property owners can afford the current rate rise and probably be able to afford the rate increases we’re about to have,” he said.
“I don’t think we’ll see a big rise and forced sales activity until we see the average lending rate get above and beyond 6 per cent . . . I think we’re going to see many would-be sellers hold back until they believe that the downturn has come to an end.”
