There are currently 377,300 houses for sale across Australia, according to SQM Research data released today – up 21.9 per cent on last year.
Why is this significant?
Well, we have some 8.9 million houses. A quick back of the envelope calculation tells me 3.79 per cent of all our houses are for sale right now.
But wait, we typically exchange about four per cent of these each year.
This suggests we have over eleven months stock on the market today. The US is struggling with 9 months of supply on the market, a level which is driving down prices.
And this before the start of the Spring selling season, when would-be vendors unveil their polished treasures, gardens are at their best and the birds are singing tra la!
Hmmm. I see a price reset as bountiful supply overwhelms cautious demand. My advice: Don’t Buy Now!
Not disagreeing just interested. Where did you get the annual house turnover figures. I imagine it varies a lot by location. Obviously a large portion is people selling to buy elsewhere and some is due to death or infirmity. We used to reckon in a low cost seaside retirement area that houses were resold every 7 years on average, but your figures are very believable especially if it is new houses plus shifts. But of course, the whole thing log jams unless movements are equal in both directions or new home buyers are moving in at the bottom and pushing the pile upwards.
I try to explain to friends that demand is not really just population. With less than 3 people per dwelling and the worlds largest houses we could probably double population and accomodate everyone in the existing housing stock. Remember the old 2 bedroom war vet loan houses a lot of us grew up in, with parents in one room, grandma in the other, big sister in the walled off dining room and the boys in the double bunk on the louvered in back verandah. Cant remember feeling deprived. The critical demographic is really “new household formation” and in spec boom times a lot of that is just wanting to shack up and party. There is no family or real “household” being formed in the old sense. In Silicon Valley when the teachers who taught the IT yuppies kids could not afford to live near the schools they lived 4 or 6 to a 2 brm 3rd floor flat. So the point is that demand is incredibly elastic. People does not equal houses, and people simply will not pay what they can not pay.
The source (or at least the conduit) is the RBA:
http://blog.lvrg.org.au/2011/08/dwelling-turnover-rate-at-16-year-low.html
On the contrast with the 7-year average, I can only suggest that the average is calculated over the houses that actually “turn over”, rather than the total stock.