Yep, there’s fewer houses to choose from now

Data is actually pointing to the strongest conditions in years.

We’re still waiting for any evidence that the property market is slowing.

It’s certainly not in the listings data.

SQM reckon that the amount of stock on the market is now 7.5% lower than a year ago.
That’s substantial. And what it means is that if there’s less houses for sale (less supply), and demand doesn’t change (which I don’t think it has) then prices have to go up.

And if prices are going up then there can’t be a market crash.

(It’s amazing how many people don’t get this point.)

It’s a bit of mixed bag across the country. There were increases in Perth and Darwin, which you’d expect with a softer market. There was also an increase in Sydney, which was a little curious, but it’s hard to read too much into it just yet.

The big declines came out of the south – Melbourne and Hobart. Melbourne recorded a thumping 20% decline in listings over the year.

That means every fifth house is now off the market, relative to a year ago.

Tell me how you can’t have huge price gains when there’s 20% less stock available for sale.

And that’s what SQM are reporting too. They reckon asking prices are up a massive 6%, just in the month of May.

As Managing Director of SQM Research, Louis Christopher, said:

“The listings activity and asking prices out of Melbourne suggest there were very robust market conditions throughout May. To record a 1.2% decline in listings in the month, plus a near 6% surge in asking prices for houses is about as strong as it gets.”

As strong as it gets.

That’s a far cry from, ‘about to collapse in a burning pile’.

But look, I’m not going to make too much of a song and dance about it. If people want to believe that the market is cooling (let alone collapsing), even though the data are pointing to some of the best conditions in years, then let them.

All the more for me.

Spiro Kladis
Managing Director, Cashflow Capital

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