Stale Stock Stacking Up


The number of homes offered and unsold for more than two months – known as stale sales – has ballooned across Melbourne, according to an analysis by Prosper Australia of figures released by SQM Research.

“Don’t touch them! Maintain the Buyers Strike!” Prosper Australia campaign manager David Collyer warned first home buyers today. “The stock of available properties has ballooned, but vendors’ price expectations have not shifted. Not one inch!

In Craigieburn and Roxborough Park in Melbourne’s northern suburbs, a favourite setting for first home buyers, there are now 638 two-month-unsold homes. In all of 2010, there were only 550 properties sold in the area. There is a year’s stock sitting on the market.

The same phenomenon can be seen in the south west at Tarneit with 1066 two-month-unsold homes and Point Cook with 1634 two-month-unsold. Last year there were only 780 properties sold in Point Cook – there is now 2 years supply on the shelf.

Caroline Springs has an indigestible 485 two-month-unsold houses on offer.

In Docklands (325 two-month-unsold) and Southbank (311), the smart set are leaving apartments in the hands of the developers.

“Most sensibly priced property will clear in less than 2 months,” Collyer said. “While there are always a handful of sellers holding out for a higher price, this enormous overhang points to other causes and will take a long time to clear.

“These properties have had advertising money spent on them and round after round of open for inspections. Plus the agents have offered them to every prospective buyer in their little black book, including the vast pool of negative gearers.

“Clearly, housing supply exceeds demand in Melbourne.

Elsewhere today, the ABS released the February Housing Finance statistics, which show loans for the purchase of newly erected dwelling slumping 12 per cent in February. In the past three months, loans are down almost 36 per cent – the biggest three monthly fall in records going back 32 years.

“We are witnessing a major change in sentiment toward housing,” Collyer said. “Buyers no longer have the sun in their eyes. They reject the lie that buying a home is a financial investment. About time, too.

Collyer reiterated that he is not today calling the bursting of The Great Australian Land Bubble, but does warn it is “imminent”.

5 Comments

  1. Maurie Fabrikant06-04-2011

    In 1962, I purchased a “quarter-acre” residential block in Noble Park; at that time, such land was selling at about $11,000 per acre (actually, 5,500 pounds). My annual salary – as a recently graduated Engineer – was $2,700 (actually, $1,350 pounds). Thus the ratio of price of one acre of residential land in Noble Park to a recently-graduated Engineer’s annual salary was a little over 4:1.

    In 2011, residential land in Noble Park costs about $1,500,000 per acre and a recently-graduated Engineer’s annual salary is about $50,000; the ratio between those is now 30:1, far from the 4:1 it was five decades ago!

    Building prices have fallen due to the application of far more efficient building techniques … but the price of a house – land plus building – is now such that one “bread-winner” has little hope of purchasing a house even in a low-priced area such as Noble Park!

    The solution to this problem is simple and Prosper Australia has the answer. All you need do is ask!

  2. Michael Cousins06-04-2011

    To me housing demand is a combination of many factors. Houses are now mass produced. Massive houses on small blocks compared to small houses on massive blocks of the old days.

    The internet has made home buyers smarter. We now have information at our finger tips. We can find out almost anything. This makes it much easier to compare different properties against each other.
    Sometimes to many choices makes it hard to make a decision.

    When I purchased my first house all I needed was $7000 of savings. For a $400,000 today you would need approx $50,000 with a 95% lend.

    Who has $50k saved up these days. If we make houses easier to buy they inturn become easier to sell.

    With the demand on rental property eventually something has to give.

  3. Paul Meleng07-04-2011

    Even if it does not fall it aint goin up, and thats a good reason for young folk not to buy. Live cheap and feral, put maximum in super, save the rest. Stay mobile and build your skills and experience and career.

  4. james07-04-2011

    keep up the good work prosper. I received a mail out from Noel Jones agents today – they took the time to devote a paragraph to the buyer strike. So you are definately having an impact. the agents are worried. Well Done!!

  5. aushousingcrash07-04-2011

    I just vomitted. Terry Ryder confirms he’s a far-right, rent seeking heartless bastard. http://www.theaustralian.com.au/business/property/overrated-first-timers-should-look-to-fringes/story-e6frg9gx-1226034773448

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https://prosper.org.au/2011/04/06/stale-stock-stacking-up/