Bottom of property market may be imminent as listings fall for second consecutive month

The number of listings in the residential property market has declined for two months this year in what could be an early sign that the market is beginning to bottom out according to new listing figures from research firm SQM.

The listings came as the auctions market once again delivered a less-than-stellar result, indicating that the winter selling season has well and truly taken hold.

SQM managing director Louis Christopher says the total number of online residential property listings fell by 2% during June, to 363,389, with Darwin the only capital to record a month-on-month increase – 1% since May.

The biggest decline was in Hobart, which saw listings drop by 6% since May, to 3,444.

“This represents two straight months of declines now,” Christopher says. “We still think this is much to do with seasonality, as in winter time we generally see that decline in new listings coming.

“However we note that it’s normally just a once-off effect. If you see the numbers we’ve had declines for two months straight and we think there is something else going on here.”

Those figures may suggest the fall in house prices could be over soon but Christopher says that isn’t the case – total online listings have still increased by 23% during the past year – an extra 69,217 listings since June 2010. Melbourne listings jumped 47%.

“This would suggest house prices are still falling given the level of supply we have,” he says. “The ABS is still going to be reporting house declines and when they come out for the June quarter we will see a decline. Perhaps even in the September quarter.”

Christopher says while price declines are likely to be seen for the rest of the year he believes “there is a real chance that listings may have peaked and we are at the bottom of the market.

“The chances are increasing for that to occur. We need to see more information, some more listings, but this is definitely surprising to see a second monthly decline in listings, so for property investors this may well be a slight positive,” he says.

Auction results over the weekend were poor, bolstering the view that any recovery will likely be several months away.

According to the Real Estate Institute of Victoria there were 439 auctions, with 343 selling and 196 passed in, resulting in a clearance rate of 55%. Chief executive Enzo Raimondo said the result is a small improvement over last week’s result but still under the 59% average for the year to date.

Sydney recorded a clearance rate of 52.8% from 212 reported auctions with Brisbane and Adelaide recording clearance rates of 23.1% and 58.8% respectively.