Declining October Melbourne residential listings bring some balance to market

The number of residential properties listed for sale in Melbourne fell by 1.4% over the busy month of October, lending some support to what is considered an oversupplied housing market currently favouring buyers.

Melbourne online listings fell from 51,564 to 50,861 from September to October with year-on-year figures now down 0.8%.

This was the steepest monthly fall recorded of all the major capital city markets in contrast with the nation result which was virtually unchanged (up 0.3%) at 374,445 a mere difference of 1,071 listings compared with September.

SQM Research managing director Louis Christopher called the October data a surprise result.

“We were expecting listings to rise in October following the steady result in September and to be fair some capital cities have recorded a rise, but overall it is becoming clear to us that this is an abnormal result for this time of year and suggests to us that stock is being absorbed by buyers and/or vendors have been withdrawing their listings.

“We are starting to believe that it is the former rather than the latter,” he says.

Matching strong recent price gains, Darwin registered the strongest decline in residential listings of all capital cities falling 2.7% to just 1,166 properties for sale – down 26.3% year-on-year.

In contrast, Sydney recorded a 4.5% increase in listings over October to 31,773 while Perth gained 1% to 17,689.

This was a reversal of what happened in September, the first month of the spring selling season, when Melbourne recording a 0.7% rise in online residential property listings while both Sydney (-2.9%) and Perth (-3%) both recorded noticeable declines.

However, both Perth and Sydney listings are more than 10% down on a year ago while Brisbane listings are down 5.5% (28,585) on a year ago, following a 0.9% fall over October.

RP Data-Rismark figures show a 0.8% rise in the Melbourne house price to the October quarter to a median of $508,000 while unit prices are down 1.3% to a median of $420,000.

RP Data senior research analyst Cameron Kusher says he expects Melbourne property prices to bounce along near the bottom for the next 12 to 18 months.

In October BIS Shrapnel managing director Robert Mellor predicted an exodus of Melbourne investors with a big rise in new apartments being completed in Melbourne over the next two to three years exacerbating the current oversupply of housing.

According to property market analyst Michael Matusik ,since 2009, Victoria has created 69,000 too many new dwellings, representing “about a two-year oversupply based on the current annual underlying demand for 34,000 new dwellings across the state”.

SQM Research notes that Canberra (6%) and Sydney (4.5%) have experienced the most noteworthy month-on month increases.

“As the spring selling season is well under way, the increases in these capital cities do not come as a surprise; what is surprising however, is that stock levels have not swollen dramatically during spring as is usually seasonally expected,” says the firm.

“This is perhaps a potential indicator that the market has begun to recover – albeit modestly."