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At a time when listings are drying and mortgage stress is rising, the research firm’s new tool “identifies a targeted segment of home loan customers who are highly likely to list their home for sale”.
Powered by a combination of pre-listing activity observed on CoreLogic’s platform, RP data and a comprehensive database, the system, dubbed Propensity to List, has been developed to assist banks and lenders with the hardest parts of client retention.
“Engaging at the right time is one of the greatest retention challenges,” explained CoreLogic head of banking and finance solutions, Eugene Vassiliev, who further elaborated on the system’s importance to banks and lenders.
“Customers that list for sale are both at a very high risk of attrition and an opportunity to retain for the next, likely more substantial, mortgage,” he said.
“However, by the time the property is actually listed for sale, customers would generally have already made up their mind about their future financing needs and the opportunity for the current lender to engage and retain them is lost.”
He believes the system fills a very significant “pre-listing blind spot” which he described as “identifying customers who are highly likely to list their home for sale within the next three months”.
In order to offer its predictions, the model utilises a host of data from CoreLogic, including search and activity data from various platforms, transfers and listings data, and market trends. CoreLogic believes the tool is 60 times more accurate than a random sample.
Given the high interest rate environment currently swallowing Australian borrowers, Mr Vassiliev explained “customers will hunt for the best deals and an intuitive lender who supports them through their life stages is more likely to retain.”
According to the firm’s research director, Tim Lawless, the Propensity to List tool may be more useful for regional banks and lenders.
“At the end of May, the Propensity to List model showed 2 per cent of regional homes were likely to list for sale before the end of August, up from 1.3 per cent a year ago,” he explained.
Western Australian regional markets lead the charge as regions where home owners are likely to list with 2.8 per cent of properties potentially hitting the market in the next three months. Capel (5 per cent), Bunbury (4.7 per cent), Boddington and Port Hedland (both 4.6 per cent), are the four WA council zones with the highest proportion of properties likely to be listed.
Casting a view to the nation’s capital cities, only 1.2 per cent of properties look likely to hit the market in the coming months according to CoreLogic, down 0.4 per cent on the figure recorded a year ago.
The Australian Capital Territory boasts the highest portion of capital city homes bracing to enter the market, with 2.5 per cent of the territories properties likely to list by August, followed by Perth, where this rate drops to 2 per cent.
Australian property listings have dried consistently for the better part of the year with Mr Lawless revealing the flow of fresh listings arriving onto the market has trended below the five-year average since September last year.
As a result of this listings squeeze, housing values across the country have begun rising, with the research firm’s Home Value Index (HVI) reporting its first monthly increase in 10 months back in August.
Over the four weeks ending 25 June, Mr Lawless explained capital city listings are 26 per cent beneath the previous five-year average with that number jumping to 33 per cent for our regional market.
Despite this environment, he noted CoreLogic’s Propensity to List tool “expects tens of thousands of properties to list in the next couple of months.”
Reaffirming the tool’s importance to lenders, Mr Vassiliev believes its utilisation “can fuel smarter property decisions, both for their teams and their customers.”
This is particularly pertinent in this currently high interest rate environment, which could potentially be exacerbated when the Reserve Bank of Australia (RBA) conducts its July board meeting next Tuesday (4 July).
As rates and mortgages rise, Mr Vassiliev conceded “customers will hunt for the best deal.” In these instances, “an intuitive lender who supports them through their life stages is more likely to retain.”
“Despite lenders’ best efforts, they are often simply engaging too late,” he said, before concluding the Propensity to List tool will facilitate lenders “engaging with relevant communications to increase their chances of retention when they buy their next property.”
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