Week 19, 2020; Price predictor

Week 19, 2020; Price predictor

Inventory requires two key measures; a) the average amount of properties listed for sale in a given suburb or region and; b) the average volume of properties sold . When you divide a/b you get a measurement known as inventory.

Like any market for products, unsold inventory often needs to be discounted to find willing buyers. Luckily for most Australian suburbs, especially housing markets, inventory levels have been extremely low nationally. Most suburbs are currently still below 5-months of stock (houses) as of May 2020.

As a general rule of thumb I have always adopted the US standard of 6 to 7 months as a ‘balanced’ market. Levels higher than 7 start to push prices down and levels below 5 will see price rises. Recently, using Sa3 regions, I plotted price changes against inventory with a very unsurprising result.

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