By John McGrath 

A lack of stock for sale in both Sydney and Melbourne has substantially contributed to a prolonging of the current boom. Over the past 12 months, there’s been plenty of buyers in the market but not nearly enough homes for sale to meet that demand. When this happens, prices inevitably increase.

The current boom is in its fifth year and that is an unusually long period for high-price growth. What needs to change is a reduction in demand or an increase in supply – or both – to bring these markets back to normal selling conditions and normal patterns of annual capital gains.

So, it’s interesting to see some new figures from CoreLogic, which show that supply of established housing stock available for sale in Sydney and Melbourne is at its highest level for this time of year since 2012. We’re not seeing a flood of new listings coming onto the market, but rather the increase in supply is due to a slower rate of sales. Or in other words, a slight softening in demand.

This is often the first sign that a booming market has turned. Demand softens because prices get to such a high point after a long period of growth that buyers start giving up and exiting the market.

It’s not uncommon now to hear about would-be upgrader buyers choosing to stay put and renovate or extend their current homes because they feel that trading up is just too difficult. First home buyer activity remains very low and we might see some evidence of a reduction in investor activity soon due to further lending restrictions imposed by APRA recently. All of this adds up to lower demand.

Whether this new data from CoreLogic indicates a turn of the cycle or a blip, we don’t yet know. My feeling is that both Sydney and Melbourne are at, or around, their peak for this cycle and we’re certainly overdue for a period of price consolidation, which I continue to believe is a healthy sign for the market.

Vendors are still in the driver’s seat but this won’t last forever, especially if demand is on the way down. If you’ve held your property for a long time and would like to fully capitalise on this boom, I’d say now is the time to sell. A change in conditions is just around the corner. Don’t fall for the myth that Winter is a bad time to sell. Talk to your local agent and consider your options now.   

As we all know, properties typically sell faster and for higher prices when demand outweighs supply. CoreLogic released another report recently that lists the fastest selling suburbs in every state for the 12 months to January. Of course, NSW and VIC have the most impressive results, but it is interesting to note how quickly properties are selling in some areas that are not in booming capital cities.

Fastest selling suburbs in each state

NSW – Houses

1. Lapstone: 9 days

2. Mayfield East: 10 days

3. North Gosford: 10 days

4. Valley Heights: 11 days

5. Glossodia: 12 days

NSW – Apartments

1. South Penrith: 7 days

2. Wyoming: 7 days

3. Lisarow: 10 days

4. Camden: 12 days

5. West Gosford: 13 days

VIC – Houses

1. Tooradin: 8 days

2. Wandin North: 9 days

3. Diggers Rest: 10 days

4. Carrum Downs: 10 days

5. Frankston North: 10 days

VIC – Apartments

1. Endeavour Hills: 9 days

2. Mooroolbark: 13 days

3. Bayswater: 14 days

4. Lilydale: 15 days

5. Bayswater: North 16 days 

QLD – Houses

1. Keperra: 10 days

2. Algester: 13 days

3. Willowbank: 13 days

4. Middle Park: 14 days

5. Ferny Grove: 15 days

QLD – Apartments

1. Oxley: 15 days

2. Elanora: 20 days

3. Reedy Creek: 21 days

4. Hendra: 22 days

5. Carina Heights: 22 days

SA – Houses

1. Melrose Park: 25 days

2. Rosewater: 25 days

3. Edwardstown: 28 days

4. Tranmere: 28 days

5. Surrey Downs: 29 days

SA – Apartments

1. Firle: 14 days

2. Rose Park: 20 days

3. Greenwich: 23 days

4. Frewville: 25 days

5. Collinswood: 28 days

WA – Houses

1. Daglish: 14 days

2. Menora: 18 days

3. Subiaco: 19 days

4. Floreat: 22 days

5. Shenton Park: 23 days

WA – Apartments

1. North Beach: 29 days

2. Mount Pleasant: 32 days

3. Palmyra: 33 days

4. Shenton Park: 33 days

5. Queens Park: 36 days

TAS – Houses

1. Montagu Bay: 5 days

2. Mount Stuart: 6 days

3. Moonah: 8 days

4. Warrane: 8 days

5. South Hobart: 9 days

TAS – Apartments

1. South Hobart: 10 days

2. West Hobart: 11 days

3. Battery Point: 12 days

4. Youngtown: 12 days

5. Dynnyrne: 13 days

NT – Houses

1. The Gap: 41 days

2. Tiwi: 49 days

3. Desert Springs: 49 days

4. Girraween: 56 days

5. Braitling: 58 days

NT – Apartments

1. Leanyer: 58 days

2. The Gap: 64 days

3. Woolner: 66 days

4. Fannie Bay: 80 days

5. Rapid Creek: 83 days

ACT – Houses

1. Ainslie: 16 days

2. Dickson: 21 days

3. Higgins: 23 days

4. Downer: 25 days

5. Hackett: 25 days

ACT – Apartments

1. Theodore: 29 days

2. Calwell: 30 days

3. Isabella Plains: 37 days

4. Page: 37 days

5. Garran: 37 days

Source: CoreLogic, ‘Top 10 Fastest Selling Suburbs in Each State’, published 1/5/17. Above figures show the shortest median selling time for houses and apartments over the 12 months to January 2017