The number of homes put up for sale continued to rise nationally in
May, indicating more trouble for the soft housing market.
The total online listing of houses and apartments rose 2.4 per cent
in May to 380,215 from 371,470, nearing the most recent national
peak seen in March 2012, of 389,770, according to property data
research group SQM Research.
The rise was led by Melbourne where listings increased 7.6 per cent
to 52,094 properties, near the peak seen in November 2011, when the
Reserve Bank began cutting rates to spur the domestic economy.
“Quite clearly the results have been driven by a rapid increase in
Melbourne,’’ said SQM Research director Louis Christopher,
while noting that most capital cities saw stock increases.
Over the year to May, Melbourne listings surged 19.4 per cent, SQM
data showed. In
Sydney, listings rose 4.4 per cent in May to 32,380
properties, while easing 0.9 per cent over the year. Capital city
home prices dropped 1.4 per cent in May following an 0.8 per cent
slump in April, according to RP Data.
Mr Christopher said the rising level of housing stock pointed to
more trouble for the housing sector.
“There is definitely more stress in the market as there has been an
increase in supply without a corresponding increase in demand,”
said Mr Christopher. “Indeed the increase in supply was probably as
a result of a low number of buyers in the market place.”
Jitters about the health of the economy mixed with uncertainty
about mortgage rates over the past year has left the housing
market, long described as ‘‘unaffordable’’, under a cloud with many
would-be buyers staying on the sidelines.
The RBA has cut 100 basis points from the cash rate since November
of last year, including a surprise 50 basis point reduction in May.
The central bank has sought to support the lacklustre domestic
economy.
Commercial banks, however, have passed along less than the full
amount to consumers, adding to the uncertainty. The RBA will decide
on the interest rate setting again today, with a slim majority of
economists tipping a 25 basis point cut to the 3.75 per cent cash
rate.
‘‘Overall we can describe the impact of rate cuts so far as being
muted,” said Mr Christopher. ‘‘Perhaps it’s helped the market
not deteriorate further – it hasn’t created any recovery yet.’’
Auction clearance rates, a sign of the market’s health perked up in
early May after the cut but have remained weak, he said.
Clearance rates in Melbourne were 60 per cent last weekend, the
Real Estate Institute of Victoria said, while in Sydney clearance
rates were 54 per cent, according to Fairfax-owned Australian
Property Monitors.
‘‘At these levels, I can only conclude that house prices are still
falling for most capital city locations, as we speak,” said Mr
Christopher.
May’s national listings were 3 per cent higher than a year ago, the
data showed.
Source: SMH
Phone: 07 3452 9622
