We thought we had seen the peak of the market in March as many pundits were predicting and saying the market was easing and yet we have just set a new PB for our Australian residential business. In May 2021 we set a new record for the value of sales for our Australian residential business at $5.53 billion, just eclipsing the previous record set two months ago in March.
New Zealand recorded its strongest May ever with $1.73 billion in sales, another big month despite some evidence that the government housing policy is starting to take effect, with reports of lower investor numbers together with a moderating interest from first home buyers.
As a combined group, we wrote $8.05 billion in sales, which was unthinkable this time last year when we wrote $2.95 billion. We were about 8% shy of our March 2021 group record.
We are so proud that our members helped almost 16,000 people with their property ambitions during May. With restrictions being reintroduced in the final week of May across Victoria, we are well aware of the risks that remain to the broader economy. However, the underlying trends have been building over the past 12 months to create perhaps the best conditions we have ever seen in our 119 year history.
The combination of improving economic conditions and low interest rates has continued to create strong demand for housing. The media keeps reporting that the number of properties for sale remains well below average, and that this is contributing to the upwards pressure on property prices. But this commentary is misleading, as it is referring to ‘all stock on the market’. Our new listing authorities are firmly up on two years ago (by 15 per cent) and up on one year ago ( 21 per cent). Yes, the total stock on the market remains down 30 per cent on two years ago, but this includes old stock that has been sitting on the market for many years.
One metric that has eased slightly is open home attendance from its peak in March when we had more than 80,000 people attend 4,468 open homes, to the 75,400 who attended 4,423 listings in May. However we’re still recording upwards of 200 attendees at some properties during their campaigns, which is incredible heading into the winter selling season.
Our auction markets continue to defy gravity. Across Australia and New Zealand we had 3800 auctions booked – an all time record. Of those we cleared 74 per cent under the hammer, while 20 per cent sold prior to the auction. The average number of registered bidders per auction remains at 5, with average active bidders at 3. We are so proud of the fact that on average, our vendors achieve almost 12 per cent more by going to auction than by taking the best offer prior to auction. That’s a consistent figure we have reported on all year.
During May we hosted our annual franchisor conference, Crows Nest, where more than 150 of our team gathered (virtually) for three days of case study learning and our famed Curiosity Day (There’s no such thing as a bad curiosity, as Brian always says, the only bad thing is no curiosity). Many of the greatest innovations in our business have stemmed from our Curiosity Day, such as Pulse and our express auction reporting system.
Of course the relationship between property and finance is a symbiotic relationship and we are so grateful to have insights from our broker friends. The fastest growing mortgage broker aggregator, Loan Market Group, booked a record May with $2.46 billion home loan approvals. Most economists agree that the cash rate and short-term mortgage rates are likely to remain at their record lows for an extended period of time, due to an expectation that labour markets won’t tighten sufficiently to see inflation moving back to the target range of 2-3 per cent until at least 2024.