Residential stock levels continued to rise in May, led by Melbourne, dashing earlier hopes that the number of properties on market may have peaked last month.
Figures released this week by SQM Research revealed that the level of residential stock around the nation increased during the month of May by 2.4 per cent to reach 380,215.
Year-on year, stock on market rose by three per cent nationally.
RP Data also reported earlier this week that, according to its statistics, the number of properties being advertised for sale reached 308,500 in May, up nine per cent on-year.
“It was previously believed that stock levels may possibly have peaked for this cycle, following recent stabilization and subtle declines in stock on market figures,” SQM said.
“However, it appears that there has been a change in direction over the past month, with rising stock levels, albeit modest increases, indicating Australia has not yet reached the peak in total residential property listings.
Hobart (up 20.8 per cent to 1,234) and Melbourne (up 19.4 per cent to 52,094) have recorded the highest yearly increases, whilst Darwin has exhibited the most substantial yearly decline, falling by over 30 per cent since May 2011 to 1,252.
“Quite clearly the results have been driven by a rapid increase in Melbourne, but we also note the other increases recorded for the majority of the capital cities and so overall, this does raise questions once again on whether stock levels have peaked,” Managing Director of SQM Research, Louis Christopher said.
“And further, at these levels, I can only conclude that house prices are still falling for most capital city locations, as we speak.”
Across the capitals, Adelaide recorded a 3.0 per cent on-year increase to 17,356; Brisbane fell 8.0 per cent to 27,872; Canberra rose 13.6 per cent to 3,686; Perth fell 13.6 per cent to 18,785, while Sydney eased 0.9 per cent to 32,380.
RP Data’s research director Tim Lawless late last week that the result represents a larger than normal pool of homes available for sale at a time when transaction volumes are running well below their five year average.
Yet there remains some positives out in the market, he added.
“Each of the key vendor metrics we analyse have improved over the month,” Mr Lawless said. “Vendor discounting has reduced from a peak of -7.9 per cent to -7.1 per cent which suggests that vendors are becoming more realistic about price expectations on their home. The average number of days it takes to sell a property has also fallen from the seasonal highs recorded earlier this year.
“The typical capital city house is now taking 63 days to sell compared with 70 days last month.
“Auction clearance rates have also levelled around the 50 per cent market compared with an average of about 45 per cent throughout the second half of 2011.”