Why are Stock Levels So Low?

House prices are rising at the fastest rate in 32 years, and while there is strong demand from buyers, one of the main factors driving prices is low stock levels.

Across Australia, we’re still seeing the lowest levels of stock that we’ve seen in more than five years. That includes the most recent house price boom between 2015 and 2017.

Now that sentiment in the housing market is improving, why are stock levels so low?

Transaction Costs 

One of the major reasons stock levels in Australia continue to dwindle, is the high transaction costs involved in buying and selling property. The main issue for many is stamp duty, which is particularly relevant in our two highest-priced cities, Sydney and Melbourne. Stamp duty is a disincentive for people to change properties, and we see this commonly with potential down-sizers who choose to stay in their current property because of the costs involved.

Selling Off Market 

Over the past 12 months, we’ve also seen a big push from vendors looking to sell off-market. An off-market transaction occurs when a property is not listed on a real estate portal. Initially, these types of transactions began occurring because of the uncertainty in the property market. However, because of the strong demand and record low interest rates, we’re now seeing aggressive buyers looking to purchase a property before an agent lists it.

Renovators 

Over the past decade, we have seen an increasing number of people decide to renovate their properties and upgrade. With the high transaction costs involved, when moving to a new house, it makes sense that many would prefer to put that money into upgrading their own homes. Similarly, in the last 12 months, there have been a number of government incentives aimed at getting people to renovate or build, and this has seen many choose to stay rather than sell.

Returning Ex-pats 

Since COVID, we’ve seen many Australians who have been living overseas returning home. This specific demographic of the market is typically well-paid and prefer to own property. Because of their return, we are seeing the high-end of the property market in Australia with the largest price gains, and much of it is being driven by strong buying interest from Australians returning home.

Why YFA?

Our motto has always been “Honesty” and Over 20 years, we have always believed that understanding the customer requirement should be the first priority. We are very passionate about helping individuals and families to identify financial goals with the correct focus on their plans for the long run through us home loan consultant.

We feel proud and blessed to win awards because of successfully assisting people to achieve financial success. What makes us stand out from others is the utmost trust from our clients who have trusted us. We have always aim to provide updated yet useful blogs by adhering to traditional values of transparency and integrity, while continuing to bring steady and consistent performance over the long term. Our experienced home loan broker is always there to assist you.

We love going beyond the bolts of financial crisis in an easier manner just to help people believe that money never blocks their happiness. Our mortage experts try to the best of our abilities to be a sane, and trusted entity in the sector of Wealth Management via providing services in Finance & Insurance.

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