The Domain Holdings Australia Ltd (ASX: DHG) share price closed 2.9% lower on Friday, but could it be headed lower?
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Why is the Domain share price under pressure?
There have been no new ASX announcements from the real estate media and technology group since July 1.
However, investors were keen to sell down their holdings with the Domain share price down 10.5% for the year.
I would think there is a strong correlation between housing market expectations and Domain's value. A bull market for residential property is good for property listings as buyers and sellers are keen to interact.
However, there are signs that the Aussie housing market could be under pressure.
One article in the Australian Financial Review (AFR) caught my eye on the weekend.
Weak auction clearance rates have some commentators expecting a housing market correction later this year and in early 2021.
Domain recorded just 285 Melbourne homes listed for sale this week, down 36% from the previous week. That's also the lowest number in two months with a preliminary clearance rate of just 58%.
The numbers were higher in Sydney with 508 auction listings at a clearance rate of 66%. Of course, listings and clearance rates are not the be-all and end-all of housing market strength.
These numbers do, however, provide some food for thought. The Domain share price dropped 2.9% on Friday but I think it's worth looking ahead to the August earnings result.
CoreLogic data suggested home prices values to be down an average 1.1% in Melbourne and 0.8% in Sydney.
That could mean sellers think twice before listing their property in the current market. There's also the coronavirus impact to consider as buyers consider their job security and ability to take on leverage right now.
What can we expect in August?
Despite some question marks, there is still strong support for Aussie property in 2020.
The government stimulus package continues to roll out, which is good for construction, renovation and the property market as a whole.
That, combined with homeowners wanting to sell near the top, could be good for Domain's August result.
With the Domain share price down 10.8% this year, I think investors are bracing for some more bad news.
However, any signs of market strength or medium-term earnings growth could see the property group's value climb in August.
