By Eliza Owen, Head of Research Australia
Short-term resales have emerged as a major housing market trend in 2023. New CoreLogic analysis shows that in winter, 16% of listings added to the market for sale had been owned for less than three years. This marks a series high going back to 2008, where the 15-year average proportion is less than half that (7.9%). The underlying number of new listings held for three years or less also reached a series high of 17,828.
Short-term resales can occur for many reasons, including people ‘flipping’ homes, making large capital gains, or moving for work. But in an environment where interest rates have risen rapidly and cost of living pressures are high, resales due to mortgage serviceability constraints may also be a contributor. The accelerated rise of short-held listings (where the previous sale date was in the past three years), is distinctly noticeable from May 2022, when the underlying cash rate started to move higher from record lows.
There is also a marked difference between the trend in regional Australia and the capital city markets. Proportionately, the uplift in short-held listings is higher in regional Australia, where a fifth of all new listings added to the market through winter had only been purchased in the past three years (or as early as September 2020).
This is an interesting trend to emerge in the context of COVID-19, which was associated with record levels of internal migration to regional Australia. Data from the ABS showed net movements to regional Australia from capital cities hit almost 12,000 in the March quarter of 2021, up from a previous decade average of 5,298. By March 2023, the latest (provisional) ABS figures show net regional migration has eased back to 5,645 in the quarter. It is possible that some of the recent departures from regional Australia are some of those who moved to the regions through COVID, which may be associated with the sale of a property purchased through the pandemic.
However, it is worth noting that the rise in short-held new listings was trending higher in regional Australia before the pandemic, from around mid-2019. This was in an environment of falling interest rates and was near the trough of the downturn in regional Australia from 2019.
Across the capital city markets, the trend in short-held listings has been broad-based. Brisbane had the highest concentration of short-held listings through winter, comprising 19.2% of all listings added to the market. Interestingly, the rest of Queensland also had the highest portion of the combined regional markets at 23.8%. Like the broader regional market, south-east Queensland was an exceedingly popular internal migration location through the pandemic. The charts below summarise the portion of short-held new listings added to the market on a rolling three-month basis. With the exception of Hobart and Darwin, each of the capital cities is showing near-record high proportions of short-held listings coming to market through winter.