The latest capital city data relating to the average number of days it takes to sell a residential property shows that in May homes were selling at close to their fastest rate on record.

The average time on market figure is measured by the difference between the initial listing date of a property for sale and the contract date. The figure is valuable because it highlights the rate of sale in a market. If the days on market are short it is typically indicative of a seller’s market where homes are selling rapidly and buyers have little time to ponder a purchase decision. Alternatively, when the average selling time starts to rise, buyers will typically have more scope to deliberate their decision and negotiate on the purchase price. Short selling times will typically coincide with rising prices and long selling times will generally see less upwards price pressures.

The latest combined capital city data showed that homes were on average taking 37 days to sell. The rate of sale was close to a record low and across the two largest cities homes were selling at their fastest rate on record at 26 days in Sydney and 32 days in Melbourne. It is important to note that these figures are focussed solely on private treaty sales and don’t include properties sold at auction.

The suburb level data to April also highlights a rapid rate of sale across certain capital city suburbs.

For houses, Acacia Gardens in Sydney had the quickest rate of sale at just 16 days. The first chart highlights that the suburbs with the shortest days on market have much lower figures in Sydney and Melbourne relative to the remaining capital cities. The other point to note is that in most cities it is either the more affordable of ‘middle’ priced suburbs where the rate of sale is quickest. It reflects the fact that those areas with the largest pool of buyers are typically going to achieve sales quicker.

 

Houses | Top 5 capital city suburbs with the shortest days on market, April 2015

 

Looking at the unit market again it was a Sydney suburb with the shortest time on market. Across 16 unit sales over the past 12 months, units in Constitution Hill remained on the market for an average of only 9 days. Sydney in particular tends to have a much shorter average time on the market than all other capital cities. The suburbs listed tend to be characterised as inner and middle-ring suburbs; they are also generally areas with established rather than newer unit stock.

 

Units | Top 5 capital city suburbs with the shortest days on market, April 2015

 

With home values continuing to rise and interest rates remaining low it is reasonable to expect that homes will continue to sell relatively quickly over the coming months. The amount of stock for sale in most cities is lower than at the same time last year which also tends to create a level of urgency in the market for buyers.

 

Article by Cameron Kusher, CoreLogic RP Data senior research analyst.

 

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