New research has shown the number of properties being listed for sale has reduced around the nation.
Figures released by SQM Research have revealed that national residential property listings decreased by nearly five per cent in April to be down nearly 12 percent from the same period last year.
In Brisbane, listings reduced by 5.6 per cent in April and were down about 10 per cent over the year.
Since the start of the coronavirus crisis many property experts were predicting that lower listings was the likely outcome in the months ahead.
Part of the reason was the economic uncertainty from the pandemic that caused some vendors to hold off selling their property either by not listing it or withdrawing it from the market.
However, as the data outlines, there were still more than 290,000 properties for sale across the country, because people need to sell for a variety of reasons – regardless of what is happening here and overseas.
Why are lower listings a good thing?
It might seem a little contrary, but fewer listings are a good thing for property markets.
In essence, that’s because of supply and demand.
When there is an excess of properties on the market, that is when prices start to fall.
While fewer listings are usually a sign of strengthening market conditions, that is not the situation at present because of the continued economic uncertainty from the virus.
Rather, the number of listings has reduced in-line with the number of active buyers, which is essentially cocooning the market.
If the number of listings had stayed the same, but buyers had retreated, then we would likely start to see a softening of prices.
That is not what is happening at present.
The SQM Research also shows that capital city asking prices actually increased marginally for houses and units over April –and were up significantly compared to the same period last year with a 9.4 per cent increase for houses and a rise of three per cent for units.
The latest CoreLogic data also shows that most property markets remained resilient last month.
In fact, Australian dwelling values recorded an increase of 0.3 per cent in April, even though listings have fallen along with sales activity.
Every capital city, apart from Melbourne and Hobart, recorded higher dwelling values over April, according to CoreLogic.
So, what does it all mean?
Well, it means that real estate has remained the stable asset class that it has always been.
Record low interest rates, as well as the variety of government and lending financial support packages, are underpinning markets near and far by preventing an influx of distressed sales.
With restrictions on open houses, and auctions, eased, our property market has certainly held firm.
And that’s a situation that should give everyone confidence in the months ahead.
Written by Joel Davis