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New listings drop to 3-month lows in May: REA

New listing volumes dropped in May 2021 to the lowest monthly volume since February this year, but remain higher compared with previous years, according to research.

The REA Insights Listings Report June 2021 – which is a monthly report analysing new and active listings on realestate.com.au – has revealed that new listing volumes declined by 4.4 per cent in May 2021.

This represented the lowest monthly volume since February this year, and followed a 7 per cent monthly decline in April 2021, the report said.

The monthly decline in new listings was greater across the combined capital cities (down 5.6 per cent) than it was across the combined regional markets (down 2.2 per cent), which the report noted highlighted a more robust regional market.

Despite the decline, the number of new listings was 61.6 per cent higher year-on-year, with capital cities recording a larger rise (68.8 per cent) than regional areas (50.4 per cent), the data showed.

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New listings in Melbourne saw the biggest monthly fall in May 2021 (down 11.4 per cent), which the report attributed partly to the COVID-19 lockdown.

Canberra also recorded double-digit percentage falls in new listings over the month (down 10.8 per cent), the report said.

Similarly, new listings in regional Victoria decreased by 6.6 per cent month-on-month, marking the biggest regional market fall, the report said.

On the other hand, new listings in Darwin are at the highest level they have been since May 2016, rising by 19 per cent month-on-month, and 155.8 per cent year-on-year, according to the figures.

New listings increased in regional Queensland (1.3 per cent), Perth (0.1 per cent), regional Western Australia (19.0 per cent), and regional Northern Territory (48.3 per cent) during May 2021, the data showed.

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The report also said that each capital city and regional market recorded a year-on-year increase in new listings due to COVID-19 lockdowns and significantly low new listing volumes across the country at the same time last year.

Meanwhile, active listing numbers (which means more properties were listed than sold) rose by 0.9 per cent in May across the country, which the report said has highlighted the slower rate of overall sales.

Despite this slight increase in May, the total number of national active listings remains 13.7 lower year-on-year.

Regional active listings were down 27.1 per cent year-on-year, while capital city listings were up by 2.5 per cent year-on-year.

Active listings in regional markets fell to record-low numbers in May 2021, down 1.7 per cent month-on-month, the report said.

It added that every regional market had fewer active listings in May 2021 than they had in May 2020, while demand for regional property has remained strong as active listing numbers continued to decline.

Demand still exceeds supply, house prices to rise: REA Group

Commenting on the report findings, REA Group’s executive manager of economic research, Cameron Kusher, said that demand and sales have remained at higher levels compared with a year ago, and are still close to historic highs, but not as strong as they were prior to Easter.

He said that this may be indicative of “some heat coming out of the market”, but also said it may be seasonal.

“Other impacts include the removal of government stimulus and increases in longer-term fixed rate mortgages,” Mr Kusher said.

Mr Kusher said that new listing volumes have historically fallen over the winter months before recovering in spring, and added that September would be a “real litmus test for the market”.

He said key factors to monitor would include increased mortgage rates and demand levels.

“While demand for property remains undoubtedly strong, a slight softening in the market over recent months has resulted in fewer sales on a weekly basis,” he said.

He concluded: “With less market stimulus and substantially rising house prices, we don’t expect the level of demand to return to previous highs. Nevertheless, demand continues to outstrip the supply of properties for sale, particularly in regional areas, which should lead to further price increases, albeit at a slower pace of growth.”

[Related: Properties selling at record speeds: REA]

New listings drop to 3-month lows in May: REA
New listings drop to 3-month lows in May: REA
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Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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