Total advertised stock on market across Melbourne has increased by more than 300 per cent in four weeks as a result of easing restrictions, proving that listings numbers have ultimately been responsive to changes in social distancing policies.
Since onsite, private inspections resumed on 28 September, new listings volumes have soared in the Victorian capital.
CoreLogic data shows the number of new listings, or the unique count of dwellings added to the market for sale, has increased around 330 per cent in the four weeks ended 18 October. This represents an increase in new listings volumes from 1,606 in the four weeks to 20 September, to 6,974 over the period to 18 October.
Therefore, total advertised stock on market across Melbourne has gone up to just over 21,000 properties in the same period.
“The result is likely due to months of pent-up decisions to sell from vendors, and reflects how the real estate transaction process has remained tied to physical inspections,” CoreLogic’s head of research Eliza Owen said.
The four-week trend shows new listings plummeting to levels below the new year holiday period amid stage 3 and 4 restrictions. Following the four-week period ended 27 September, new listings have bounced significantly.
After months of restrictions, pent-up demand from sellers has accumulated so much that more stock was recently added for sale in Melbourne than any other capital city region.
Thirty-nine of 40 Melbourne SA3 regions (regions with populations between 30,000 and 130,000) saw an increase in new listings over the past four weeks. Macedon Ranges was the only area to see a decline, with seven fewer new listings added.
A significant increase in new stock across Melbourne can mean different things for the state of the market, according to Ms Owen.
For one, “forced” selling was a possibility from the pandemic as significant job losses across Victoria may have limited the ability of some households to keep paying their mortgage.
The latest financial stability review from the RBA noted that October was the period most mortgage deferrals were set to expire, which may have contributed to an increase in new listings in recent weeks. However, CoreLogic data does not point to a significant increase in mortgagee in possession events across Victoria.
A large increase in stock can also be a sign of a market rebound as vendors sell to meet rising demand. High buyer demand can mitigate risk for distressed sales, because the added demand pushes up prices.
“One way to assess the state of the market through listings data is to observe how total listings volumes are tracking against new listings. New listings rose faster than total listings across Melbourne in the four weeks ending 18th of October. New stock added to market increased by around 5,370 properties, but the change in total stock was only 4,790,” Ms Owen highlighted.
“This suggests at least some stock on the market has been absorbed over the past four weeks.”
Other metrics point to an improvement in market conditions, according to her. In the week ended 18 October, the final auction clearance rate was 60.2 per cent across Melbourne, which was achieved alongside the highest volume of auctions seen in two months.
Over the past month, the rate of decline across Melbourne dwelling values has also eased.
“It is clear that even after long, strict restrictions, vendors are keen to sell. However, due to the lag between an initial property listing and a sale, it will be a few weeks before we can understand how strong buyer appetite is,” Ms Owen concluded.