Since private inspections started back up again in Melbourne towards the end of last month, a flood of new listings has entered the marketplace.
CoreLogic data shows the number of new listings has increased by roughly 330 per cent, in the four weeks ending last Friday, October 18.
New listings volumes in the four weeks to September 20 were 1606, compared to 6974 over the period to October 18.
Private inspections began on September 28.
During this same period, Sydney saw 6642 listings, which is less than Melbourne.
While this may appear to be purely good news, Eliza Owen, Head of Research at CoreLogic Australia points out new listings may represent distressed sales.
“A significant increase in new stock across Melbourne can mean different things for the state of the market,” Ms Owen explained.
“Forced selling was a possibility from the pandemic, as significant job losses across Victoria may have limited the ability of some households to keep paying their mortgage.
“The latest financial stability review from the RBA noted that October was the period most mortgage deferrals were set to expire, which may have contributed to an increase in new listings in recent weeks.
“However, CoreLogic data does not point to a significant increase in mortgagee in possession events across Victoria.
“A large increase in stock can also be a sign of a market rebound, as vendors sell to meet rising demand. High buyer demand can also mitigate risk for distressed sales, because the added demand pushes up prices.”
Ms Owen points out that, by comparing total listings to new listings, you can assess the state of the market.
“New stock added to market increased by around 5370 properties, but the change in total stock was only 4790,” Ms Owens notes.
“This suggests at least some stock on market has been absorbed over the past four weeks.”