Residential listings are set to pile up when the housing market reopens in January with a surge in the number of homeowners looking to sell before prices peak, fresh Domain data shows.
Requests for appraisals have jumped by 32 per cent in Sydney compared to the same time last year, and are up by 42 per cent in Melbourne, indicating that a large number of potential vendors are looking to enter the market in the new year.
Domain chief of research and economics Nicola Powell said the flood of new listings could shift the market faster than expected.
“The surge in appraisals is quite revealing, particularly at this point in time as we’re so close to the end of the year,” she said.
“I think this shows that more homeowners are thinking of putting their homes on the market, for fear of missing out on the peak, and that will probably come to fruition early next year.
“Housing stock is now building up and rapidly changing the dynamics in the market in favour of the buyers.”
All the other capitals also posted significantly higher appraisals, with Adelaide climbing by 34 per cent, Brisbane by 19 per cent and Perth by 23 per cent.
Dr Powell said the surge in the listings in early January could extend through autumn.
“This year, I am expecting it to be a strong late summer and autumn selling season where we’re going to see lots more choices come onto the market for buyers,” she said.
“We’ve passed the peak rate of growth, and we’re going to be hitting the peak price soon. So, sellers will try to sell while conditions remain strong, but the tide has started to turn.”
While affordability and threat of higher rates and further credit restrictions from APRA were also weighing on demand, the weakness in the housing market was mostly fuelled by thousands of fresh listings coming into the market each week, Dr Powell said.
Listings have soared across the capitals in the past 12 months, with Sydney racking up 64 per cent rise.
Melbourne climbed by 40 per cent, Brisbane was up by 20 per cent, Adelaide by 35 per cent and Perth by 41 per cent.
Last week, Domain recorded 3106 homes listed for auction – the highest number of homes sold under the hammer on a Saturday since March 2018.
Sydney has 1190 scheduled auctions – the highest volume so far this year. There were 1472 homes set for auction in Melbourne, which was more than double compared to a year ago.
Next weekend, over 1100 auctions are scheduled in Sydney and 1400 in Melbourne.
Dr Powell said some buyers may hold out for better deals next year as stock continued to rise.
“I think buyers are now realising that the next opportunity is just around the corner,” she said.
“I think buyers are more mindful that they don’t want to overpay. I think the flood of listings that we have seen in recent weeks have given buyers more choices and has killed the buyer frenzy that we have seen earlier.”
The power shift towards buyers is already starting to manifest in the auction results. Since the lockdown ended, clearance rates have been drifting lower as demand failed to keep up with the rising stock.
In Sydney, clearance rates have dropped by 12.8 percentage points to 68.7 per cent and Melbourne fell by 9.2 percentage points to 68.6 per cent, data from CoreLogic shows.
The proportion of properties passed in at auctions had risen by 5.4 percentage points to 16.2 per cent in Sydney and rose by 6.1 percentage points to 17 per cent in Melbourne over the past four weeks.
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/home-buyers-the-winners-as-owners-rush-to-sell-before-market-peaks-20211130-p59dg9