Fresh home listings are now rising faster than buyers can absorb them across the combined capital cities, indicating tougher competition for vendors and more options for buyers in spring, data from CoreLogic shows.
The dynamic also portends a further slowdown in home value growth in the coming months as price pressure eases.
Advertised stock is now rising faster than demand across the combined capital cities. Nikki Short
Over the four weeks ended August 13, the number of new listings across the combined capital cities jumped 11.8 per cent above the five-year average, and were up 1.5 per cent compared to a year ago.
Tim Lawless, CoreLogic research director, said the sharp rise in new listings was likely fuelled by vendors looking to take advantage of the recent rapid price increases, as well as those that needed to sell due to financial distress.
New stock in Sydney surged 22.6 per cent compared to the five-year average and climbed 10.9 per cent over the year.
In Melbourne, fresh listings jumped 25.5 per cent compared to the five-year average, and rose 9.7 per cent higher compared to a year ago.
The hefty increase in new listings has lifted the total number of advertised stock on the market, indicating supply is now outpacing demand, according to Mr Lawless.
“As the flow of new listings gathers some pace, demand hasn’t quite kept pace. This means there are more new listings being added to the market than buyers can absorb,” he said.
“The overall available supply levels are starting to rise for the first time in quite some time, which is good news for buyers.
“It also sends a warning sign that we might be seeing an early rebalancing between supply and demand … we know that that imbalance is really the key factor in supporting price growth.”
Over the past four weeks ended August 13, total advertised stock jumped 5.3 per cent in Sydney, rose by 4.4 per cent in Melbourne and climbed by 4.3 per cent in Canberra. Across the combined capitals, total listings rose by 2.2 per cent.
Some areas in Victoria, such as Ballarat, Surf Coast and Melton, are already seeing total stock rising by up to 61.3 per cent above the five-year average in the past four weeks.
Pre-listings activity by selling agents on the CoreLogic’s RP Data platform points to further increases in stock over the coming months.
In the past four weeks, agent activity nationwide rose 14.8 per cent higher than at the same time last year, and 31 per cent above levels in 2019.
Thomas McGlynn, Sydney-based selling agent and chief executive of BresicWhitney, said the group’s listings have already risen by 50 per cent compared to pre-pandemic.
“I think we’re probably going to have the highest volume of properties listed on our website this spring since the start of COVID,” he said.
“We’ve already seen listings double in many parts of inner Sydney over the past two months, which means more competitive selling conditions.”
Mr Lawless said the rapid rate of price growth recorded since February would moderate further as more supply hit the market.
”I don’t think demand will increase at the same rate as fresh supply does,” he said.
“Consumer sentiment is very low at the moment, and there’s a really close relationship between sentiment levels and market activity.
“Borrowing capacity is down 20 per cent to 25 per cent, and lenders are still cautious about lending on high debt-to-income ratios. For those reasons, I don’t see demand rising as quickly as listing numbers might.”
Despite this, ANZ believes house prices nationwide could rise 5 to 6 per cent this year, before slowing to around 3 per cent next year.
“The impacts of housing shortages and tight rental vacancies are currently outweighing the impacts of cash rate increases,” wrote Adelaide Timbrell, ANZ senior economist.
“Forward indicators, including housing finance approvals and auction clearance rates, suggest further housing price increases in the near term.”
Sydney house prices are forecast to rise 9 per cent this year, Melbourne and Brisbane to lift by 4 per cent, and Adelaide and Perth by 6 per cent. Hobart is set to fall by 4 per cent, Darwin to drop by 1 per cent and Canberra to post zero growth.
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