The market could not have been more consistent. We recorded $5.1 billion worth of sales in Australia in October 2022, just as we did in September. The result, which was 26 per cent less than what we recorded in October 2021, continued the trend we’ve reported for most of this year.
New South Wales and Victoria reported the biggest year-on-year declines in sales volumes of 35 per cent and 28 per cent respectively. Queensland continues to outperform these larger states, though its network still reported a 14 per cent decline on its 2021 figures. South Australia was approximately in line with last year. Western Australia was the only state to be up on last year – in fact, well up – with a 17 per cent jump. Does this year-on-year fall in our sales figures point to a market in turmoil as the media headlines are so quick to proclaim?
Mike DelPrete is a highly regarded real estate technology strategist based in the United States. He argued recently that comparisons of today’s United States real estate market to 2021 was a bit meaningless because 2021 was “a strange aberration where everyone moved, house prices skyrocketed, and nearly every real estate business posted record revenues… 2021 is an outlier, not a benchmark.” Could the same argument be applied to Australia? Looking at our figures over the past three years, it probably can. Our October 2022 sales results, while well down on October 2021, were well up on October 2020 and October 2019, by 25 per cent and 35 per cent respectively. Even
when we exclude the impact of average property price growth over this period by focussing on the number of sales, again we see that the number of sales has also increased over October 2019 levels.
So our October numbers show anything but a market in turmoil.
Whilst the usual trend is for October’s sales to exceed September’s, we did flag in last month’s Ray White Now that listing numbers in recent months were relatively weak. So it’s pleasing to see somewhat of a bounceback in the value of residential stock listed for sale during the month at $6.1 billion, which was well up on $5.5 billion in September. We also reported last month that auction clearance rates, auction bidder numbers and days-on-market have stabilised, pointing toward a more balanced market between buyer and seller. This stabilisation has no doubt created greater confidence in potential vendors to come to market.
The total amount of property for sale in the market has risen sharply this year. In October 2022 we held 21,377 listings, a 39 per cent jump over the prior October when we held 13,005 listings. The most interesting aspect of this is not the fact that listings are up by this much, as we held more listings in the same month in 2017, 2018 and 2019, and just five per cent less in 2020. It’s that there were so many more listings that had been on the market for more than 90 days. Twice as many in fact. Nearly 38 per cent of today’s listings are older than 90 days.
So what happens to these listings? Extrapolating our data for the first 10 months of this year, these listings will have a 48 per cent chance of selling.
We’re seeing some great case studies of properties that have been on the market for some time being re-marketed as auctions and subsequently sold. An example of this is Ray White Windsor identifying 10 properties that had been on the market for between two to three months, and then taking them to auction, achieving seven sales in 42 days. Our ‘relaunch campaign’ encourages vendors that have been on the market for some time to have a renewed marketing campaign via the auction method to close their sale by Christmas. Many of our clients will see value in not having to worry about what the market might be like in 2023, and bring fresh energy to their campaign to achieve a result before year’s end.
Ray White Group