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According to CoreLogic’s days-on-market data, properties are selling at their fastest pace in the past 12 months, reaching 30 days on the market by September 2023.
The exception was August when days on the market dipped to 29 days.
The data showed the number of days a property is listed on the market before settlement has been steadily decreasing since January 2023 when it took an average of 36 days to sell a property.
This coincided with property values increasing after eight consecutive months of declines.
Head of research at CoreLogic Australia, Eliza Owen, explained that the trend in days on the market is closely aligned with the trend in housing values.
She said: “As housing values go up, days on the market go down, and vice versa.
“The market has been in recovery mode, and that sense of urgency has come back to the market a little bit, with days on market shifting slightly lower than the peak in the start of 2023.”
She also mentioned that sales volumes have remained around historic average levels.
However, she noted a slight drop in volumes at the beginning of winter, which could be partly due to seasonality or a slowdown in capital growth since May.
While properties are selling at a faster pace and property values are expected to continue to rise, the prospects for sales to increase “are unlikely unless we see a pickup in consumer sentiment, a drop in interest rates, or an easing of the mortgage serviceability assessment buffer”, she said.
These factors seemed unlikely in the coming months, she added.
Looking ahead, market conditions are expected to remain fairly stable until the end of the year, with more substantial improvements in 2024 or possibly as late as 2025 when the downward trend in the underlying cash rate takes effect, according to Ms Owen.
Indeed, the days a property remains on the market are currently 10 days longer than almost two years ago when the median days on the market were 20 days in November 2021, during a period of record-low interest rates.
Properties began taking longer to sell a few months before the first cash rate hike in May 2022 and peaked at 36 days in January 2023.
Ms Owen explained that properties took longer to sell mainly because obtaining housing finance became more challenging in a rapidly rising interest rate environment.
“Prices took time to adjust to higher interest costs, buyers pulled back from the market, and as a result, properties took longer to sell as the market hit its bottom in January of this year,” she said.
“By February, the market had started to recover again amid a shortage in listings (less people put their property on the market for sale), and buyer demand had bounced back due to extraordinarily strong net overseas migration, which has created a temporary surge in population growth.”
Across the country, the trends vary significantly between regions.
In Perth, for example, the days on the market have fallen to 13 days, decreasing from an already low base of 19 days in January 2023.
Ms Owen attributed this to a low level of supply in the capital.
Founder at Success Finance Solutions, Sarcha Sagisaka, said it’s even less in many cases, estimating it takes nine days to sell a property in the capital.
Properties in the lower price brackets are selling the “day they appear online” before the first home opens and sight-unseen purchases remain popular.
“In the current market, you can sell your home for more than the bank would value it,” Ms Sagisaka said.
Melbourne (28 days), Sydney (29 days) and Brisbane (22 days) have seen steady decreases in the days it takes for properties to sell as property prices have risen alongside tight supply.
Likewise, properties in Adelaide have been selling faster, dropping to 30 days from 37 in January.
In comparison, Darwin, Hobart and the ACT have seen properties take much longer to sell (59, 44 and 42 days, respectively), primarily due to those markets experiencing price declines.
[Related: Economists expect home values to reach new record in 2023]
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