We are seeing evidence that the market continues to soften but how far will it go?  That is the million dollar question so we get Louis Christopher’s opinion.
Transcript:
Kevin:  The figures released by Louis Christopher at SQM Research show that maybe the softening of the market that we have been seeing might just continue. Louis joins us to talk about that.
Good day, Louis. How are you doing?
Louis:  Good to be here, Kevin. Doing well, thank you.
Kevin:  Thanks, Louis. The listings were steady in May across the country?
Louis:  Yes, that is correct. Nationally, the listings stood at 325,000 rounded, which was absolutely unchanged from the previous month of April. Overall nationally, listings, when we look at the year-on-year change, was just up by 0.4%.
What is happening is that there have been some cities that have recorded a little bit of lift in the month, some cities recording a decline in the month, and regionally, when we look at, for example, the mining towns, they’re all recording falls in listings right now. So, the regionals are kind of off-setting some of the slow-down that we’ve seen in the capital cities.
Kevin:  This is obviously a reflection of a lowering of consumer confidence, saying, “Well, maybe this is not the best time to put my place on the market,” Louis?
Louis:  Yes and no. We did record, for example, a rise in Melbourne of 2.4%. I think what’s going on there is that some vendors are looking at the market and saying “Actually, we need to sell now if we want to try and pick the top of the market or try and get that price that we were hoping to get because the market could end up moving south from here.”
I think there are a number of vendors who are in that camp right now. They’re actually thinking, “Let’s sell now while the going is still good.”
Kevin:  There have been some reports out in the last week or two about particularly investors wanting to sit on their hands and saying “This is not necessarily a good time. I think I’ll probably hold onto my property for a little bit longer.”
Do you share that sentiment, Louis?
Louis:  I think that there are potential vendors who look at it that way. And maybe they’re not vendors to begin with; they’re long-term property owners who are quite happy to just see the cycle through, so they’re not really that interested sellers.
But there’s also another camp of property owners who have been looking to potentially exit out. They’re either looking to upgrade, downgrade, maybe sell out altogether, and they will be looking at the market now, particularly in Sydney and Melbourne, saying “We should sell now while we still got relatively more buyers in the market because things could actually get worse later in the year.” So, there is definitely that camp of sellers that is operating in the market right now.
Kevin:  I think quite a few people have been surprised by what’s happened in Hobart – and I noticed in your report, too, the listings have fallen in Hobart, which is probably going to make that situation a little bit worse for potential buyers.
Louis:  Absolutely, yes. Listings were down by 4.7% for the month. So, right now, there are just 2000 listings in the marketplace for Hobart, and some years back, just to give you an idea, during the slowdown, Hobart normally gets about 10,000 to 12,000 listings.
There is hardly anything out there right now, Kevin, in terms of listings in Hobart. It’s definitely a seller’s market. Listings are down 26% year on year. I’d rather be a seller right now than a buyer. Let’s put it that way.
Kevin:  In Canberra, too, listings have fallen just a little bit. We’ve seen a little bit of a lift in that Canberra market in recent times.
Louis:  We have. The Canberra market did have a recovery in 2016 and 2017, and it appears so far this year that the recovery is set to continue. It’s not a boom by any means, but it is nevertheless a market that is favoring sellers. There are plenty of buyers. And the Canberra housing market has always been correlated to how much expenditure is occurring at the federal level.
Kevin:  Yeah, because it flows through to employment, doesn’t it?
Louis:  Absolutely.
Kevin:  Interesting comparison there too, Louis, just before I let you go. The capital city asking prices for houses rose slightly but fell for units.
Louis:  That is correct. We have to be careful we don’t read too much into these numbers on a week-by-week, month-by-month basis, but it is true that we recorded some rises. For example, Brisbane recorded a 0.2% rise in houses and just a 0.1% rise in units.
It’s mixed overall in terms of what the asking prices actually did show. In Melbourne, for example, they recorded a 0.5% fall in houses and a 0.7% fall for units. So, mixed overall. I would say long-term, it’s showing that houses tend to perform a little bit better than units with regard to capital growth.
Kevin:  Excellent. Always good talking to you, Louis Christopher from SQMResearch.com.au.
Louis, thanks for your time.
Louis:  Good to be here, Kevin.