00:00 Look, you don't really know why these quick resales are happening unless you go out and
00:06 ask the sellers.
00:07 But there are a few things we can infer from big data trends.
00:12 Looking at housing market performance in the past few years, we've seen quite volatile
00:16 conditions, especially coming off the back of a short but sharp decline in national property
00:21 values of 9.1% between rates starting to lift in May of 2022 and February this year.
00:30 So in the context of that sharp downturn, it's unusual to see quick resales because
00:35 it means people are less likely to be making a profit.
00:39 So if they're not selling for profit, one might infer that they could be selling because
00:43 mortgage costs have increased so greatly in a short period of time.
00:47 With the increase in the cash rate from May of 2022, we've seen the underlying interest
00:53 rate go up to 4.1%.
00:56 And in terms of how that's translating to mortgage rates in the past couple of years,
01:01 you've seen these average owner occupier rates of 3% go up to about 6% as of May.
01:07 And when you think of, you know, a $500,000 loan, you're looking at monthly additions
01:15 to repayments of about $800.
01:18 So that could be prompting some of these resales.
01:24 It's kind of hard to tell exactly the motivation, but I think in that context, it's fair to
01:29 say there could be more motivated selling as a result.
01:33 Okay.
01:34 Is it worse or better in any particular areas of the country?
01:37 Yeah.
01:38 So some of the highest proportional increases we've seen in these short-term resales are
01:44 in areas like Brisbane, where capital growth conditions have actually been pretty favourable.
01:50 So it might make sense to do this kind of short-term resale and make a gain.
01:56 But there are areas like Hobart, for example, where there's been an increase in those short-term
02:01 resales of over 13% as well.
02:04 And market conditions there haven't been nearly as strong.
02:07 So there may be some more motivated selling in that sense.
02:11 Even if you look more granularly at the data, some of the top regions like the Gold Coast,
02:17 you know, that could be a reflection of maybe migration trends, people making a lifestyle
02:22 change during COVID and then reversing that decision.
02:26 Capital growth trends have been pretty strong there, so it could be appealing for a quick
02:30 resale.
02:31 But then again, you've got areas like Blacktown in Sydney, which is another area of relatively
02:37 high short-term resale, and their conditions haven't been quite as favourable.
02:42 So it's probably a bit of a mixed bag in terms of the motivations, and that's reflected in
02:47 the locations as well.
02:49 Eliza, as you mentioned, these short-term resales more usually happen in a booming market.
02:55 Is it possible to see from this data whether people are making profits from their properties
03:01 or are they downsizing because they can't afford the size of property?
03:06 The overwhelming majority of these short-term resales do make a profit, but we've seen an
03:11 increase in the portion of loss-making sales as well.
03:15 For example, if you take those two-year resales, the portion of loss-making sales within two
03:21 years has increased from around 3% in the March quarter of 2022 to almost 12% in the
03:30 March quarter of 2023.
03:33 So there has been a sharp increase in the concentration of loss in short-term resales.
03:38 Again, that reinforces that these might not be optimal selling times for people, but they
03:44 may not have a choice if they're facing issues of serviceability.
03:48 Other data that we're seeing, which is quite unusual for this time of year, is the new
03:54 listings hitting the market, which would usually be going through a seasonal slowdown.
03:59 We've actually seen a 4% increase in new listings across the combined capitals over the past
04:04 month.
04:05 So, again, some unusual trends in the data that when you piece them all together, it
04:11 perhaps does speak to a little bit of issue with serviceability and maybe sales at a time
04:19 that is not quite optimal for capital gains for everyone.
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