The average number of days on market has edged upwards as the housing sector weakens, reflecting tougher finance conditions, fewer buyers and a longer period of negotiation before vendors achieve a sale.
But with the federal election now behind us, what will be interesting is seeing how the flow on effects impact on consumer sentiment.
For now, Corelogic research analyst Cameron Kusher says current conditions still see buyers’ in the driver’s seat.
“The rise in time on market is a symptom of higher supply, with advertised stock levels across the combined capitals are at their highest level for this time of the year since 2012, and lower demand reflected in capital city settled sales down 16 per cent year-on-year,” Kusher said.
Across Sydney, properties were typically taking 62 days to sell in April this year, while in regional NSW properties were taking 76 days.
“At the same time a year earlier, Sydney properties took 31 days to sell and regional NSW properties took 50 days,” Kusher said.
Over the past three months, Kusher says Melbourne dwellings have typically taken 43 days to sell compared to 27 days over the same period in 2018.
“Although days on market fell over the past month in Melbourne, properties are taking longer to sell than in recent years while in regional Victoria there has been a recent spike in days on market,” Kusher said.
Over the past three months, Brisbane dwellings are typically spending an average of 60 days on the market, in comparison to 34 days for the same period last year.
While in regional Queensland time on market has increased to 77 days, up from 47 days.
“Although values have declined over the past year in Brisbane and regional Queensland it has been a much more moderate decline than in Sydney and Melbourne,” Kusher said.
“Despite this fact, there has been a sharp spike in days on market highlighting that selling conditions have become much tougher despite values having only fallen moderately.”
Adelaide properties currently take 54 days to sell, up from 45 days for the same period a year ago.
Canberra’s days on the market has risen from 31 days a year ago to 52 days. Perth properties typically take 62 days to sell, up from 48 days.
And Hobart’s hot market typically takes 32 days, up from nine days to sell this time a year ago.
While Darwin properties currently spend 77 days on the market, compared with 67 days a year ago.
Land developers call bottom of property market
Land developers AV Jennings and Villa World have called the bottom of the property cycle after a year of slumping sales and consumer caution blew a hole in their profits.
AV Jennings said the current property cycle has “bottomed” and that it will deliver a stronger result next financial year, after its profits were cut in half to $16.4 million by wary homebuyers steering clear of big commitments.
“General market sentiment is clearly beginning to improve … a modest uptick in visitor numbers to sales offices and online is evident and is expected to be sustained during FY20,” AV Jennings said.
Villa World chief executive Craig Treasure said soft consumer sentiment, tight credit conditions and the uncertainty caused by the federal election had created “difficult headwinds”.
“We are seeing that sales enquiries have started to improve across Villa World’s projects, however buyers remain cautious,” he said.
Villa World’s profit after tax of $23 million was also shredded compared to the previous year when it earned $43.6 million.
“This result is consistent with commentary disclosed to the market since December 2018 and reflects the decline in the Australian residential housing market and softer consumer sentiment,” Mr Treasure said.
Villa World’s land projects are concentrated in Queensland and Victoria.
All metrics for the group suffered: earnings per share were down 48 per cent to 18.2c, total revenue fell 11 per cent to $391.6 million, and sales numbers slumped to 870, down from 1788 the previous year.
The property pain was similar at AVJennings where turnover fell 20.3 per cent to $296.5 million and profits crashed by 48 per cent.
“The lower profit reflects softer market conditions, particularly in Melbourne and Sydney,” the company said.
It paid an interim dividend of 1c on 22 March and will pay another 1.5c dividend on 20 September this year.
Villa World has agreed to a takeover by AVID Property group for $2.345 per share. It will declare a fully franked dividend of 31c, as a portion of the total takeover price if it goes ahead.
Brisbane Prices Could Be Headed For Recovery
Brisbane prices are at their lowest level in the cycle, according to the latest national property clock from Herron Todd White (HTW).
The house values in Brisbane, Bundaberg, Ipswich, Rockhampton, and Toowoomba were at the bottom, according HTW.
Meanwhile, prices in Cairns, Gladstone, Mackay, Townsville, and the Whitsundays are starting to recover, the data showed.
There was momentum for the price growth in Brisbane, given that the capital city had been “bouncing along the bottom for some time now”, HTW Brisbane managing director Gavin Hulcombe told The Courier-Mail.
“I think it will be (a) steady rise, but my suspicion is in a couple of years’ time we might look back and think it (now) probably wasn’t a bad time to buy. Some areas are likely to perform better than others,” he said.
Brisbane units are also at the bottom of the price cycle, along with Bundaberg, Ipswich, Mackay, Rockhampton, Toowoomba, and the Whitsundays, according to HTW.
Apartment prices in Cairns, Emerald, Gladstone, and Townsville are already rising, the figures showed.
Index warns council unit ban will impact boomer downsizers
A new housing index has warned that Brisbane will face a flood of ageing baby boomers with nowhere suitable to live unless it embraces greater density in suburbs where houses dominate.
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