Property-stock-on-the-rise
As business confidence returns,
vendor confidence is also returning with
properties hitting the market
The last month has seen a record number of CMA reports conducted by real
estate agents. The national ‘vendor discount’ (the average difference between
the original listing price and final selling price) has fallen from 8 per cent last year
to just 5 percent and the average number of days on market is down to 35 days
(47 days at the same time last year). Business confidence hasn’t been this high
for almost two years. We are now seeing a higher level of vendor confidence and
surging agent activity. On average, a property is sold within two months after the
first CMA report is conducted. Consumer confidence is now at its highest level in two
years.
Many prospective vendors have been holding their property off the market until
selling conditions improve. This week we saw three key data releases that all
suggested the Australian residential property market should continue to provide
modest improvements over the coming months. Both business confidence and
consumer confidence also continued to rise with both indicators now above the
all important 100 point mark where optimists outweigh pessimists. One of the most
important leading indicators is the number of CMA (Comparative Market Analysis)
reports being produced by agents. The surge in CMA reports suggests the market
is already gearing up for what is likely to be a very active spring selling season
this year. Housing finance commitments again trended up, with the value of housing
loans taken out in June at their highest level since June 2007. Investor activity is also
ramping up, with investors now comprising one quarter of housing finance commitments.
Property values have increased by 5 per cent over the first half of 2009 according to
the RP Data-Rismark Home Value Indices.
Locally property is still being snapped up, with cases of properties being listed for
less than half an hour before being sold. Stock levels are still low, thus creating a
slightly undersupply of homes for sale.
17/08/2009