- More than 650,000 homes were sold last year, worth $508B
- 2003 was the last time similar transactions were recorded
- Properties sold after little - or no - time on the market
In 2021, one of the most common complaints about the property market was that there was no stock.
To take just one example, in March last year, REA Group’s director of economic research Cameron Kusher said low stock was the ‘biggest challenge’ to the market’s recovery.
The truth is very different.
In fact, a record number of listings came onto the market in 2021. Homes came onto the market and were sold in 2021 at a faster pace than at any time since the first quarter of 2008.
Instead of a year of low stock, it was a year of high stock.
More than 650,000 homes worth $508.4 billion sold in the 12 months to January 2022. The last time sales reached anywhere close to that level was in 2003, when 629,000 homes sold.
The reason most people believed the market was suffering from low stock is because many dwellings sold almost as soon as they came onto the market. You can see this most clearly when you compare CoreLogic’s data on new listings against its data on total listings.
In Australia, there were more new listings in 2021 than in 2020, yet the total number of listings on the market throughout the year was significantly lower. New listings would come onto the market and quickly sell, leaving the inventory of listings no higher than before.
There were about 40,000 fewer total listings throughout 2021 than in 2020. And there were fewer in 2020 than in either 2019 or 2018. Total listings were lower than in earlier years despite the fact that more new listings came onto the market in 2021 than in the earlier years.
As Robert Harley pointed out in the Australian Financial Review this month, 6.1% of Australia’s housing stock was sold and bought in 2021. That is nearly half-again more than the 3.7% that changed hands in 2018-19.
If so many homes were coming onto the market, why did the myth of low stock persist?
Let’s look at Perth for an example. Lily Chong of IQI WA in Perth tells me that, for much of 2021, the Perth market was weighted in favour of vendors. A balanced market in Perth is classified as between 12,000 and 13,000 listings, but for much of the year there were several thousand fewer than this.
Perhaps that is one reason why CoreLogic has Perth’s home prices climbing 11% during the year. It has taken a long time, but Perth dwelling values are now, as I write this, only 1.4% below their record high of June 2014.
In 2021, the market didn’t suffer from low stock, but high sales. Many properties came on the market, but they were snapped up so quickly that buyers often struggled to find a home they both wanted and could afford.