Melbourne and Sydney lead 4.9% monthly drop in online residential listings suggesting market may be entering "recovery mode": SQM Research

An almost 5% drop in residential properties listed for sale online over July, led by big monthly falls in Melbourne and Sydney, may indicate the housing market is close to entering "recovery mode", according to SQM Research.

SQM Research calculated that online residential listings fell by 4.9% in July led by falls in Melbourne (12.6%) and Sydney (8.7%) to reduce to total listings to 368,081.

This means listings are now down 2.4% when compared to 12 months ago when SQM Research recorded 377,213 residential listings as of  July 2011.

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SQM Research says that seasonally it is expected that stock will decrease during the winter periods.

However, “a decrease of this magnitude could be seen as the first signal that stock is being absorbed quicker than previous months".

“Indeed, if stock continues to decrease in the months ahead, this could be a potential indicator that the housing market is entering into recovery mode,” says SQM Research.

SQM Research director Louis Christopher added that while it is early days, the July decrease in listings "could be an indicator of a turning point in the market".

“We also note that nationally, there is now less stock on market than this time last year. Brisbane, Darwin, Perth and Sydney all have less listings in the market compared with July last year,” he says.

Apart from the weak Hobart market, where residential listings increased by 0.2% over July (Hobart is also the weakest market over the past 12 months with listings up 29%) all other capital cities recorded declines in online listings over the month.

Melbourne experienced the biggest monthly decline with online listings falling from 55,293 to 48,322 over July – but listings are still 4.8% above the 46,087 recorded in July last year.

Sydney listings fell from 32,390 to 29,574 over July to be down a healthy 10.2% on the 32,917 properties listed for sale a year ago.

There were also strong monthly declines in Canberra (-7.3%) with more modest declines in Darwin (-4%), Perth (-3.5%) and Adelaide (-3%).

Darwin has experienced the biggest yearly decrease with online listings down 28.6% decline followed by Perth (-15.5%) and Brisbane (-11.8%)

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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