Thursday, June 9, 2011

RPData Statistics -> Over 8 months stock on market

I haven't talked property statistics for awhile now. There hasn't been a great deal that's changed since earlier in the year. Data continues to look negative for Australian property prospects over the short to medium term. Lending is down (although some recent stats show a small uptick recently), stock on market continues to increase, auction clearance rates continue to look dismal, all signs point to even lower prices by the end of the year.

Some data recently released by RPData caught my eye and thought it was worth sharing.

The first is 'stock on market', that is the number of homes advertised for sale. RPData's statistics vary wildly from some other data providers such as SQM Research (whose last national stock on market count was reported at around 360,000), but last month saw a large move higher. This does not bode well given the already high number available and decreasing sales volume. It was reported that 283,690 are currently advertised for sale. This is around 34% higher than the same time last year (211,761).

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The number of properties advertised for rent is also on the increase (which somewhat conflicts with other reports I'm hearing that the rental market is tight), 99,561 are currently advertised, an increase of 15,429 (18%) over the same time last year. The Northern Territory has seen the number of advertised rentals more than double over the last 12 months.

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In a recent article on the RPData blog, the following chart was published which shows current annual volume of sales is around 390,000 per year:

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Based on an inventory of 283,690 properties advertised selling at a rate of 390,000 per year that leaves us with over 8 months supply on the market.

If SQM Research's data is more accurate with 360,000 stock on market then we have 11 months supply on the market.

This is sometimes referred to as the "absorption rate" (number of months it would take to sell all stock on market). Generally speaking 6-7+ months worth of available stock is considered negative for prices.

Thanks goes to @aushousingcrash for pointing out some of the data used in this post.

BB.

5 comments:

  1. ...just a nit-picky note (yes, i'm annoying!)

    It's probably invalid to use the RPData sell-rate figures with the SQM data...

    They seem to have different methods of data collection and assessment, hence why they seem to have such vastly different sales-listings totals (which i personally find quite weird and confusing...?!?!)


    As for rental listings, keep in mind that "tight" more refers to rental vacancies (expressed as a fraction) than actual number being advertised. So, rental listings could be increasing, but if demand is "high", then thigns could still be "tight" (ie, they are getting snatched up).

    Personally, i think we're on the cusp of a rental glut (increasing rental vacancy) - but you probably won't hear that anywhere else! ;)

    Cheers,
    Stewart
    (BurbWatcher)

    ReplyDelete
  2. You are right, probably best not to mix data sources where it can be avoided. That's why I headlined the RPData stats (8 months) instead of the mix (11 months) ;)

    I was trying to find some statistics on the number of rental properties there are in total (to compare to 100k advertised), but could not find. SQM national data suggests vacancy rates aren't particularly low (at least not in comparison to anytime in the last 6 years or so).

    Cheers
    BB.

    ReplyDelete
  3. Yeah, i've been unable to find how many properties there are available, at least not easily (i'm sure it could be acquired without too much fuss from govt agencies, though it might cost...)

    My data (which i list at www.burbwatch.com.au (new trial site) and www.burbwatch.wordpress.com) shows recent spikes occurring currently (my data comes out much earlier than the likes of RPData, SQM, etc, but it not as reliable!); and i've been predicting a rental glut for a couple of months now, to anyone that would care to listen. ;)

    Hence, IMHO, vacancy rates will keep rising for another 2-3 months, IMHO.

    Sales listings are peaking, and are starting to come down; but much of this is cyclic, as can be seen in the following Australian charts:

    http://burbwatch.files.wordpress.com/2011/05/aus6.png

    and

    http://burbwatch.files.wordpress.com/2011/05/aus181.png

    re: trends of SQM rental vacancy rates: yeah, it's not particularly low, but the standards of the data listed there, is it? The truth is: what does a number mean? Is 1.8% low? Sounds, low, but who knows in actuality??

    Nonetheless, i still predict that a rental glut is coming soon (even as we speak).

    We'll see!

    Regards,
    Stewart
    (The BurbWatcher)
    :)

    ReplyDelete
  4. I estimate there are around 2.7m rental dwellings in OZ. RP Data mentioned last year, that rental stock peaked in Mid-July, so it must be a seasonal spike. Last year peaked at roughly 91,000 rental listings. http://blog.rpdata.com/2010/11/evidence-growing-that-rents-and-yield-are-on-the-improve/

    ReplyDelete
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