The Reserve Bank’s 13th rate rise early November has done little to curb residential property activity with PropTrack data for October 2023 revealing a whopping 32.5% and 31.7% increase in new listings for Sydney and Melbourne respectively, compared to a year earlier.
The increase was by no means confined to the country’s two largest capital cities, with the number of new listings nationally on realestate.com.au surging 17% month-on-month in October – the month in which spring selling season typically peaks.
Overall, within its most recent view on property market supply trends, PropTrack recorded a 5.2% increase in the total number of listings nationally compared to a year ago. Buyers in four cities; Melbourne, Sydney, Canberra, and Hobart had more total properties to choose from in October than is typically the case in the past decade.
Choice improved regionally as well, with 4.8% more total properties listed for sale in October than September.
The PropTrack report flags a notable increase in regional Victoria, where the total number of properties listed for sale was higher than it was pre-pandemic.
“The number of properties listed for sale has more than doubled compared to mid-2021 when choice in regional Victoria was very limited,” the report said.
Vendors are more confident
Nationally, the number of enquiries per for-sale listings increased 19% year-on-year in October yet remains below the record high levels seen in late 2021.
What appeared to have underpinned vendor confidence in October, concludes PropTrack senior economist Angus Moore, was improved selling conditions – relative to spring 2022 – greater certainty around interest rates, and the upward trajectory prices have experienced across the country this year.
Prices moved higher in every capital city except Darwin in October.
“Property prices have climbed every month in 2023 and continued to do so in October,” said Moore.
“While markets are expecting only a modest chance of further increases, they remain a possibility… tight rental markets, strong population growth, and growing wages will continue to support fundamental demand for property.”
Other key findings in October:
- Perth bucked the national uptrend trend in new listings with -7.3% fewer new listings year-on-year.
- Regional areas increased 11.1% higher than a year ago.
- The total number of properties listed for sale regionally remains -31% below pre-pandemic levels.
Clearance rates struggle
Interestingly, the uptick in property listings has not been mirrored in national auction clearance rates, which based on Domain data fell to 60.5% from 62.8% the week prior.
Domain recorded a fall from 62% the week before to 60.5% last week in Sydney, while clearance rates in Melbourne fell from 62% to 60%.
Although unexpected, a potential interest rate hike in December could result see clearance rates softening further. There’s growing speculation that a sub-50% clearance rate in December could signal the emergence of a buyers’ market heading into 2024.
By comparison, CoreLogic data recorded a 69% clearance rate in Sydney, down from 70% the week prior, while at 68%, Melbourne’s clearance rate remained relatively unchanged from the previous week.
AMP chief economist Share Oliver believes preliminary results point to a downtrend in auction clearances, with withdrawals also on the increase.
“This suggests higher interest rates are starting to dominate again after the immigration/supply shortfall-driven surge,” said Oliver.
Based on CoreLogic data, last week the combined capital city capital’s withdrawal rate rose to 10.9%, while the portion of properties passed in at auction fell to 21.2%.