The spring housing market is falling flat

Housing activity tends to ignite during spring, but if the market performance seen during September is anything to go by, this looks doubtful. Demand and supply certainly did not improve to the degree anticipated as the warmer months approach and long school holidays loom ever nearer.

Demand increased marginally by 1.6 per cent compared with last year, or an additional 10 sales, to 631 properties sold throughout September. Despite improving only a fraction, buyer activity is increasing and this trend is expected to continue as spring unfolds.

At closer inspection of Allhomes’ sales data it appears buyers are after townhouses and units rather than detached homes. The number of townhouse and unit sales jumped annually by 15.1 per cent while the demand for homes slid by 6.7 per cent during September. It is important to note that houses always make up the majority of transactions each month, but the number of homes sold has declined annually.

Vendor activity declined by 4.9 per cent annually, or 38 fewer properties, to 745 properties listed for sale during September. House listing plummeted 16.1 per cent annually to 412 homes listed during September. The declining level of housing stock could be to blame for the sliding buyer activity. Townhouse and unit stock improved annually by 2.5 per cent to 289 properties listed during September. A total of 44 single residential blocks of land were also listed for sale during the month.

The number of homes sold under the hammer is on the rise. Over September, 43.4 per cent of houses sold at auction, compared with 32.8 per cent last September. This rising auction activity is a sign buyers are competing at auction, driving up auction clearance rates. This indicates that the slow housing activity is not necessarily a lack of active buyers in the market; it is the lack of stock and shortage of new listings.

The shortage of housing stock and level of active buyers in the market continue to push prices up. House prices rose 4.9 per cent annually to reach a median sale price of $609,000 during the September quarter. It is this market imbalance that is likely to continue to drive prices north.

Nicola Powell is a property expert for Allhomes. Twitter: @DocNicolaPowell. The MIX106.3 Real Estate Show, Saturdays, 9am-10am.