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Australia’s housing market is slowing down, especially in the once-hot southeastern capitals.
Prices are falling in nominal terms in many Australian cities, auction clearance rates are weakening and growth in housing debt is slowing, particularly to investors.
From CoreLogic, it shows the average number of days it takes to sell a property across all of Australia’s capital cities.
In December, it took an average of 40 days for a property to sell in the capital cities, up from 37 days one year earlier.
While not a significant increase, that masked some significant divergences in individual capital cities.
In Sydney, Australia’s largest and most expensive housing market where prices are now going backwards, it took an average of 42 days to sell, up sharply from 34 days in December 2016. In February 2017, just before APRA introduced tougher restrictions on interest-only lending, it was only taking an average of 29 days for a property to sell.
While not to the same degree, the average Melbourne sale time also lengthened over the year, rising to 33 days from 29 days 12 months earlier.
In line with other housing market indicators, the increase suggests these once-hot markets have cooled over the past year, significantly in the case of Sydney.
Across the smaller capitals, the results were mixed.
In Perth and Darwin, where prices have been falling for some years following the crescendo of the mining investment boom, the average sale time dropped sharply.
For Perth, it stood at 53 days in December, down from 75 days in August and 58 days a year earlier.
It was a similar story for Darwin where it dropped from 88 days to 75 days over the same period. Back in March, it was taking an average of 119 days for a property to sell in Australia’s northern-most capital.
Hobart, where prices are rising faster than any other capital right, the average sales time dropped from 34 days to 33 days over the year. In Adelaide, it also fell from 43 days to 41 days.
Like the other mainland eastern capitals, average sales times in Brisbane and Canberra rose, increasing to 53 days and 42 days respectively, up from 47 days and 39 days a year earlier.
CoreLogic says that given recent trends in prices, it is reasonable to expect that the number of days it takes to sell a property nationally will trend higher over the year, especially in the southeastern capitals.
“In particular, this is likely to occur in Sydney and Melbourne given that both cities have experience rapid rates of sale and strong growth in dwelling values over recent years,” it says.
“Vendors in those cities were market conditions are softening will need to be realistic about their pricing expectations. As properties take longer to sell, buyers will be more inclined to negotiate on asking prices and vendors may face higher competition from other properties listed for sale as inventory levels rise.”
In contrast, for the hard-hit mining capitals, CoreLogic sees better times ahead for vendors.
“Markets such as Perth, where housing values have been falling, are now showing a reduction in total advertised stock levels and homes are starting to sell in fewer days which should help to dampen further value falls,” it says.