Shares in McGrath Limited plunged more than thirty per cent today, after the listed real estate agents were forced to disclose an “unforeseen” slowdown in residential listings.
McGrath has continued to experience an unforeseen low volume of listings and sales in the first half of April, particularly in the North and North Western suburbs of Sydney. The Company believes the fall in listings in the North and North Western suburbs of Sydney is in line with the market in those areas.
According to the trading update, there has been a 25 to 30 per cent decline in listings in the “Smollen areas” compared to the prospectus forecast released last year when the company listed. The descent emerged in the later part of March.
McGrath acquired ten franchises in Sydney’s mid to upper North Shore, North-West and Northern Beaches regions from Shane Smollen in October last year.
In addition to the decline in listings, there has been a marked reduction in Chinese buyer activity in the North Western Sydney according to the group.
The disclosure will put increased pressure on property spruikers who to date has claimed the market is still strong.
» Sydney housing market issued “sell” rating – Who crashed the economy, 21st February 2016.