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Rise in listings likely to slow price growth

The surge in new properties listed for sale is likely to continue until May, putting downward pressure on price growth according to a leading agency.

Managing Director and Chief Executive Officer of The Agency, Geoff Lucas addressed a webinar announcing the agency’s half year financial results and said he expected more listings to come online based on comparative market analysis (CMA) data.

โ€œWhat weโ€™ve seen in the month of February has been a significant increase in CMAโ€™s compared to previous years and that data shows that listings are starting to lift,โ€ Mr Lucas said.

โ€œThatโ€™s why we believe, there will be a strong increase in the number of homes coming to market in coming weeks and months.โ€

Mr Lucas said there had been a sharp increase in agents requesting CMA data for listing presentations.ย 

โ€œWhen a real estate agent comes to your home to talk about a potential listing, the first thing they do is request comparative market analysis data from RP Data (CoreLogic),โ€ he said.

โ€œThey do this to demonstrate the value theyโ€™ve come up with for your home.

โ€œThe more of these we see being consumed, the more visits agents are having to living rooms to discuss the sale of their property.

โ€œThat invariably links to future sales.โ€

Rolling 7-day count of CMA activity – Source: CoreLogic

Mr Lucas said he expected the surge of listings and transactions was likely to continue until the Federal Election.

โ€œTransactions are likely to rise with a near term influx of listings,” he said.

โ€œWe think this is going to be a tailing off over the Easter period and the election period later in May.

โ€œWe then see this building again through winter and into the traditional spring selling season.

โ€œOverall for the calendar year, we expect volumes in 2022, to approximate the annual volumes we saw in 2021.”

After record growth in house prices across Australia over the past 12 months, Mr Lucas tipped more moderate growth over the next year as increased listing volumes put downward pressure on prices.

โ€œOur forecasts are broadly in line with most of the banks with a far more subdued rate of increase this year than last and we believe that will somewhere in the vicinity of 4-6 per cent for the 2022 calendar year,โ€ he said.

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.