More vendors tried to sell their property in spring – but did people buy them?
By Eliza Owen, Head of Research Australia
As social distancing restrictions eased across Victoria from the end of September, more vendors put their property up for sale. In the three months to November, the number of new listings added to the market across Australia averaged around 39,000 a month. This was 20.8% higher than in the winter months.
Although winter usually sees fewer listings due to seasonality anyway, strict restrictions and subdued economic conditions across Melbourne in particular had weighed on transaction activity over winter. As the more new stock was added to the market in the months following, it is worth considering how much demand for property absorbed this rising supply.
If the rising stock is met with low levels of demand, property listings accumulate, giving buyers more choice and bargaining power. This could be a concern for sellers, some of whom may have no choice to sell if their ability to repay their mortgage has been impacted by COVID-19. This was considered a risk to property markets more broadly with many exiting mortgage deferral arrangements through September and October this year.
CoreLogic tracks the volume of sales compared with new listings added to the market₁, in order to partially understand the state of supply and demand – in other words, are people actually buying a property at the same rate as new stock is being added? This metric, known as the ‘sales to new listings ratio’, represents the number of residential property sales for every additional dwelling advertised in the same period