- Interest rate rise has negatively impacted listings
- All states underperforming in varying degrees compared to last year
- Older property listings clearing out may signal positive change
Ray White Data Analyst, William Clark, has released a new listing data report. According to the Australian property and real estate group’s data, vendor listings nationally and across states have maintained their lacklustre performance, strongly impacted by interest rate rises. However, data showing a recent dip in older listings may offer a gleam of hope.
Interest rate rises, steady inflation, and lowering prices
Vendor listings continue to fall in light of the Reserve Bank of Australia’s (RBA) decision to increase interest rates for the 11th time in 12 months, up to 3.85% from the previous cash rate of 3.6% in April*. With interest rates at their highest level since 2012, financing remains out of the cards for many as the cost of borrowing rises.
Inflation dropped to a quarterly rate of 1.4%, or a possible 5.4% annualised rate of inflation continues to hover at its present level. Prices sunk marginally, which was an unwelcome trend for Australia’s sellers, with listings suffering a 19.7% slump in the three months to April compared with the same cycle last year.
Listings continue to fall from 2022 highs
State-by-state comparison of listings
Capital cities Sydney, Canberra and Melbourne are still underperforming, clocking in a -26.7%, -22.7% and -26.7% respective drop in listings when compared to the same month last year. Meanwhile, Brisbane, Darwin and Perth recorded steady losses in listings, coming in at -16.7%, -11.4% and -24.4%. Hobart and Adelaide also saw diminished listings, albeit to a more minor degree, at -9.5% and- 0.5%, respectively.
The major cities continue to see large losses
Further interest rate rises will continue harming future listing activity, although the strong price growth this month may offset some negative effects. Nevertheless, the inflation rate has increased slightly from last month, which means that another interest rate rise may be on the horizon should inflation continue to move upward. Therefore, the number of listings is expected to flounder for the foreseeable future.
Finding a ray of hope in dwindling number of older listings
One potential silver lining of the dearth of listings is the trend of older listings clearing out, which signals less competition for new vendors. A market with fewer old listings demonstrates more compatibility between listings and prospective buyers.
Older listings are piling up
The clearing of older listings may indicate activity in the marketplace, with more buyers in the market. Ray White argues that paring down the number of older listings on the market and increasing the sales of new listings is essential to recovering vendor activity.
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* The article was written prior to the latest RBA decision which has now seen the interest rate rise to 4.10%.
