458 | Are We At The Turning Point? From Slow Growth To A Surge in Listings - Chat with Tim Lawless
Aug 31, 2023
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Tim Lawless, CoreLogic's Research Director, discusses economic and market conditions, surprising Winter data, and what it means for Buyers and Sellers as Spring approaches. They also explore the rise in fresh listings and the importance of financial conversations with children. The episode delves into rising property prices, supply and listings in Australian markets, and the RP Data platform used for researching properties and market trends. A must-listen for investors heading into the spring buying season!
There has been a surge in new property listings during winter, defying the usual seasonal trend and potentially challenging buyer demand in the market.
Investors should consider the long-term sustainability of property investments, as regional markets with low supply levels may lack diverse economic drivers for sustained growth.
Real estate agent activity is a leading indicator of new property listings, with a significant rise in agent activity signaling a potentially busier spring season compared to previous years.
Deep dives
Rise in fresh listings will test buyer demand
The report highlights a recent increase in new property listings, defying the usual seasonal trend. Normally, listings drop during the colder months, but this year has seen a 13% rise in new listings during winter. As we head into spring, the traditional peak season for property listings, the report predicts a further increase. This surge in supply could challenge the depth of buyer demand, especially considering the current lending restrictions and low consumer sentiment. If supply continues to rise without a significant rise in buyer activity, it could lead to a gradual cooling of the market.
Regional opportunities and caution for investors
The report emphasizes the importance of considering the long-term sustainability of property investments. While regional markets like Albany in Western Australia may appear attractive due to low supply levels and potential short-term gains, investors should be cautious. The lack of diverse economic drivers in these areas may limit long-term growth and sustainability. The report advises investors to thoroughly assess the fundamentals of each market and consider factors like infrastructure development and rental demand. It also warns against getting caught up in short-term market timing and encourages a focus on quality assets for sustainable growth.
Activity in real estate sector as a sign for listings
The report highlights the correlation between real estate agent activity and new property listings. Real estate professionals often utilize platforms like RP Data to research individual properties, generate comparative market analysis reports, and determine listing prices. An increase in real estate agent activity indicates a rise in new listings. This is an important leading indicator for the property market as it provides a real-time view of properties being prepared to come on the market. The report notes a significant rise in agent activity, signaling a potentially busier spring season compared to previous years.
Mortgage Repayments and Property Sales
The podcast discusses the current state of mortgage repayments and property sales. The speaker mentions that around 0.7 to 0.9 percent of borrowers are behind on their mortgage repayments, which is still below pre-COVID levels. Additionally, there is an increase in the number of homeowners selling their properties within a short hold period, indicating potential financial stress. The speaker suggests that these trends could be a warning sign of buyers who purchased around the market peak and are proactively offloading their properties. The overall impact on the market is discussed, highlighting the varying performance of different cities based on supply levels.
Market Performance and Buyer Patterns
The podcast explores market performance and buyer patterns. It is mentioned that cities with rising advertised supply levels have experienced a reduction in the pace of value growth, while cities with tight supply levels have seen accelerated value growth. Specific examples are given, such as Sydney and Melbourne having rising listing numbers and new listings, potentially impacting their growth rates. On the other hand, markets like Perth, Brisbane, and Adelaide have low supply levels, resulting in stronger month-to-month growth. The affordability factor is also mentioned, highlighting that some markets are attracting buyers due to more affordable property prices, as well as a strong rate of interstate migration. The unintended consequences of borrowing power restrictions and investor behavior are discussed in relation to concentration in cheaper markets.
He is one of Australia’s leading property market analysts and commentators who also heads a team of analysts in Australia and New Zealand. Together with his team, he provides reports on property market conditions and the interplay between economic and demographic forces.
In this episode, we’ll be unpacking it all, from the economic and market conditions we’re seeing today to the surprising Winter data that was recorded and – of course - what this means for Buyers and Sellers alike as Spring approaches.
A seriously insightful episode for investors heading into the spring buying season. Get prepared and give it a listen now! 😊
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