New property listings across the nation have dropped significantly as investors and homeowners take a ‘wait and see’ approach in the current COVID-19 property market.
Lacking the confidence that they’ll be able to achieve the sale price they want, and with no immediate reason to sell, thousands of property owners are choosing not to list their properties for sale with numerous others pulling their listings in the hope of better times ahead.
In effect - Australian property is shut for non-essential business.
In some areas across the nation, new listings have virtually dried up overnight. Regional Queensland for one has seen a 90% reduction in new stock entering the market since the crisis began.
QLD regional listings - Source: Ripehouse
Ripehouse Property Research Analyst, Will Farrell has found that while most of Queensland has taken a hit, there are some locations showing greater resilience.
“According to latest Ripehouse data, since the week ending 18th of April 2020, we have observed a drastic reduction in properties listed for sale across regional Queensland.”
“While the Sunshine Coast and Gold Coast have proven to be the most resilient, and Townsville has a slight increase, everywhere else has dramatically slowed down,”said Mr. Farrell.
Capital cities feeling the heat
It’s not just the regional areas that have seen big falls in the number of properties listed for sale.
Our large capitals have also suffered a severe fall in sentiment, with Sydney seeing a 72% drop, while Melbourne has seen listings tumble by 50%.
New properties listed for sale over the past four weeks - Source: Ripeouse
Almost across the board, one obvious trend stands out; new property listings are declining however, there are a few exceptions.
Ripehouse Property Research Analyst, Will Farrell found that not all states and regions have been impacted to the same level.
The ACT has seen a clear decline in listings in the last month (-59%), however, it is far less than in other major capital cities. That said, it is coming off a low base.
We've seen a large decline in listings in NSW (initially 72% in Sydney and 64% for the rest of the state) and that number appears to be stabilising at these new levels. We’re seeing this across the entire state and not just in the metro area. Interestingly, there’s been a slight increase in the number of new Sydney listings in the last 3 weeks (72% reduction improving to 63% of new listings as of week end 12th of April).
Despite the fact the NT has a low base in terms of new listings (~less than 200 per week), there has been a very clear and sharp fall. We suggest that this is because investors play a larger role in NT than other states.
QLD has seen some of the most dramatic falls of any state in Australia, in both Brisbane and the rest of the state. At this stage, it appears that new listings are stabilising at this new lower level. The fall in regional QLD has been particularly pronounced. For example, new listings in regional QLD reduced by 87% in the week ending the 19th of April when compared to the week to the 12th of April.
The decline in new listings in SA has been quick, but we are starting to see that begin to stabilise - relative to the other states. Indeed, Adelaide’s new listings increased in the week to the 3rd of May. New listings in Adelaide for the week ending the 3rd of May increased by 39% relative to the previous week.
While Hobart has declined like all other state capitals, it's been outstripped by the collapse of the rest of TAS (initially down 68%, with minor increases week to week since). We suspect this is a result of two factors: investors pulling out as they've done across the nation, and the local outbreak in the NW of Tasmania resulting in a comprehensive lockdown.
Much like the other states in Australia, Victoria has seen an abrupt fall in the number of new listings (around 50% in both Melbourne and the rest of the state). On the positive side, relative to regional NSW, regional VIC hasn't done too badly, with numbers holding up reasonably well.
WA has had a less extreme fall in new listings than what we’ve seen in other areas such as the NT but it has still experienced a significant collapse (initially 71% in Perth and 79% in the rest of the state).
For all real estate agents who derive their income from sales commissions, the implications are pretty grim. There are fewer properties being listed for sale and the competition from other agents remains as high as ever.
It will be interesting to see if this situation picks up in the weeks ahead as home opens are now restarting in many cities across Australia.