Australian properties are flying off the market at record speed, selling in just over a month on average, according to new analysis by REA Group.
The latest REA Insights Market Indicators Report found homes sold on realestate.com.au during May had been listed on site for just 32 days, down from an average of 37 days in April, and almost half that of the same time a year ago.
REA Group economist Anne Flaherty said demand continues to outpace supply, prompting buyers to put in offers sooner than they have in the past.
“We’re seeing properties fly off the site faster than we’ve ever seen,” Ms Flaherty said.
“That average takes into account every area across the states [and territories]. If we think about regional areas, they tend to sell properties much slower there, so the fact that on average we’ve come down to 32 days, that’s quite remarkable.”
As we enter the typically quiet winter season, Ms Flaherty said trends that usually reduce activity could actually have the opposite effect as the imbalance between buyers and sellers grows.
“Winter is a less popular time for people to sell their properties and often they’ll hold off until spring, which could mean a decrease in supply of properties for sale [during winter],” she said.
“But even with slightly fewer buyers in the market, a decrease in supply of properties for them to buy means properties will continue to sell very quickly.”
Buyers not deterred by lower levels of stimulus
Even in the absence of stimulus, record low interest rates and confidence in the housing market are continuing to fuel demand.
Email enquiries from buyers, first-home buyers and investors all rose during the month.
“The most surprising development was the large increase in enquiry from first-home buyers given HomeBuilder has now ended,” said Ms Flaherty.
It comes as separate data from the Housing Industry Association showed new home sales rose by 15.2% in May, following sharp falls in April when HomeBuilder ended.
“This increase sees sales in the two months since the end of HomeBuilder, 2.9% higher than the same time in 2019,” HIA economist Tom Devitt said.
While not specifically aimed at first-home buyers, limits on property values and income caps meant the HomeBuilder scheme largely helped aspiring homeowners.
But there are concerns that rising property values and a resurgence of investor activity could soon price first-home buyers out of the market.
“We continue to expect that demand from first-home buyers will wane over the coming months while investor enquiry will continue to climb due to low borrowing costs, attractive yields and the potential for capital growth,” Ms Flaherty said.
Recent lending data published by the Australian Bureau of Statistics showed new loan commitments for investors rose 2.1% in April to be at its highest level since late 2017.
Some heat coming out of the market
While demand remains strong, Ms Flaherty said there is some evidence of cooling pressures emerging.
“Searches from prospective buyers, though still relatively high, are starting to trend down,” Ms Flaherty said.
Search volumes as recorded by realestate.com.au have fallen 8.5% since the February peak, although still remain 17.9% higher than a year ago.
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