New home sales listings fall reflecting ‘poor sentiment’ during coronavirus restrictions

Housing stock that was listed in March has ‘really struggled to sell’ and much of it is still in the market today.

Should the market continue on a path to normality, new listings should rise while total listings fall as older stock is sold.

While coronavirus restrictions on the property market continue to lift, SQM Research managing director Louis Christopher warned “we are not out of the woods” as new listings in April dropped in line with consumer confidence.

New listings fell 7.2 per cent in Sydney and 4.6 per cent in Melbourne through April as sellers nervous about the economic uncertainty and government bans on open homes and public auctions decided to sit on their hands.

Properties lingering on the market for 30 to 60 days also increased through the month, suggesting campaigns listed in March struggled to find buyers ready to commit.

April often experiences a drop in new listings because of holidays including Easter and ANZAC Day, Mr Christopher noted, but the 11.9 per cent national fall from 2019 highlighted the impact of consumer sentiment.

“The combination of the two (holidays and falling sentiment) meant that we had this fall and new listings,” Mr Christopher said.

“Of course, what also happened was that we recorded a rise in older listings. So, it's pretty clear to us that stock that was listed in the month of March has really struggled to sell and much of it is still in the market today.

“That's always a weak sign in the marketplace.”

National new listing levels fell 4.9 per cent through April, led by a 8.7 per cent drop in Perth. Darwin (down 6 per cent), Adelaide (down 6 per cent) and Brisbane (down 5.6 per cent) each outpaced the national rate.

The NSW government’s announcement on Sunday that previous restrictions on the market place would be lifted this weekend complemented the Northern Territory’s removal of bans and Perth’s call to allow open homes of up to six people. Other states have also indicated they are looking for similar moves.

Mr Christopher said any moves to reopen the traditional property market would help to encourage sellers back into the market, but warned that it might not be smooth sailing from here, with lingering, broader-based market impediments and a potential second wave of cases likely to ripple into the market.

“The lifting of restrictions overall will provide a lift in confidence and we should probably see a lifting consumer sentiment once again from it's all-time record lows. It will be a positive for the markets, a positive for the economy as well,” he said.

“It's fair to say though, we're not out of the woods yet. There's still a lot of issues which are still with us, we still have restrictions. We still have the international border closed, and we're still recording a rise in rental listings and that is very problematic for the housing market. But, compared to where we were 30 days ago, things have improved.”

Should the market continue on a path to normality, new listings should rise while total listings fall as older stock is sold.