New property listings buck the seasonal trends as home value growth slows

New listings in capital cities rose 3.7% higher than the 5 year average last month, according to a report released by CoreLogic today. The report looked at the number of new listings over four weeks ending on July 30 and, although new listings were higher than usual for the season, it was 4.6% lower than the same time last year.

Tim Lawless, CoreLogic's research director, noted that “with total stock levels still low and selling conditions reasonably strong, it may be the case that more homeowners are picking current market conditions as a good time to sell, rather than waiting until spring when stock levels might be higher”.

The report also outlines the decreasing amount of active listings (all capitals combined) over the same period. Currently, the total number of listings is 18.3% lower than at the same time last year and 23.3% below the five-year average. As total stock levels are trending lower, Lawless says it implies that demand is keeping up with the increased inflows.

Home value growth slowing for most capitals

The report found that, while the national Home Value Index (HVI) continued to rise in July at 0.7%, its pace was slower than May’s 1.2%. Sydney saw its rate of growth halving from May’s 1.8% to 0.9% in July. Melbourne and Darwin’s rate of growth lowered to 0.3%, Perth slowed to 1.0%, and Hobart remained steady with no change in property value. Meanwhile, Canberra was the only capital city to see a decline in property value.

But not all regions saw a slowdown last month, Brisbane and Adelaide saw their pace of growth increase to 1.4%. However, both cities' growth momentum was still below the one year and 5 year averages.

CoreLogic’s report states that the slowdown in property value growth is mostly driven by a moderation in the upper quartiles gains. The rate of growth for the lower quartile and broad middle was smaller but remained more consistent over previous months.

Lawless comments that resilience in the middle and lower end of the market tracks with housing finance data “which has shown a stronger bounce back in the value of lending to first home buyers and investors over recent months.”

Housing market remains resilient

While growth has slowed, the report points out that this follows from a fast recovery trend during an environment of increased home loan interest rates , low consumer sentiment, and more cautious lending. Lawless says this could see the supply side begin to balance as long as housing demand doesn’t follow at the same pace.

One thing to look out for is a continuing demand for housing from strong population growth that is likely to remain above average levels. NHIFIC statistics forecast that the housing sector will be undersupplied by 175,000 dwellings in 2027 which could help to buoy property prices over time.

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