The Irish are in the orange
Creative Commons License photo credit: Soon.

17 September 2011

MELBOURNE:- Exponential growth in the number of unsold properties overhanging the Melbourne market continues, up 18 per cent in the last month alone.

“In the last five months ‘Stale Stock’ in Melbourne postcodes 3000-3207 has exploded, from 19,800 to 45,499 properties. In the wider Melbourne and environs, 70,856 houses have been on the market for more than 6o days and remain unsold, up from 60,045 a month ago,” Prosper Australia Campaign Manager David Collyer said today.

“We repeat and confirm our warning to homebuyers to stand aside from buying. House prices are set to fall hard. The property industry expects innocent first home buyers to catch a falling knife.

“At a moderate $450,000 per house, there is $31.8 billion in capital tied up in surplus housing just sitting there. Something – price – must give.

Prosper is tracking Melbourne’s ‘Stale Stock’ figures – property on the market for more than sixty days and unsold – as a quick indicator of change to the supply and demand equation and as a price change predictor. The raw data is from SQM Research.

“’Stale Stock’ provides an excellent snapshot of the current imbalance between supply and demand,” Collyer said.

Notable hotspots include postcode 3023 Caroline Springs (1055 stale properties), 3024 Wyndham Vale (1119), 3029 Tarneit/Truganina/Hoppers Crossing (2689), 3030 Point Cook/Werribee (3697), 3064 Roxburgh Park/Craigieburn (1499), 3076 Epping (1081), 3175 Dandenong (1071), 3199 Frankston South (1077), 3337 Melton (1996), 3338 Melton West (1179), 3754 Doreen/Mernda (2192), 3810 Pakenham (2150), 3977 Cranbourne (2643) and 3000 Melbourne (1246).

Every named postcode has more than one thousand failed sales. The volume of ‘Stale Stock’ available has risen in every Melbourne postcode, without exception.

It must be noted these figures do not include the normal swelling of houses offered in the spring selling season. All are sixty days plus on the market and were first offered 16 July or earlier. The fresh spring stock is expected to add further to these numbers as buyers continue to sit on their hands.

“These figures make a mockery of claims by the property industry of a housing shortage,” Collyer said. “Buyers are telling sellers to ‘keep it!’ as the monopoly practices that drove up prices spin out of control. This is a powerful reminder that property owners are price takers, though they try to pretend otherwise.

“The trend is entirely in line with Prosper’s prediction land prices will halve in real terms over the next 5-6 years. Don’t Buy Now!” ENDS

Media comment: David Collyer

About Prosper: Prosper Australia is a tax reform lobby group and think tank that is now 120 years old. It seeks to move the base of government revenues from taxing individuals and enterprise to capturing the economic rents of the natural endowment, notably through Land Value Tax and Mining Tax.