Buyers wrest back control as new listings hit decade-high level

For three years sellers having been calling the shots as desperate buyers have contended with bidding wars and, in many parts of the country, a property price buying frenzy that has delivered hefty capital growth.

But the tide is turning and property buyers are the ones expressing relief that levels are falling before they were overwhelmed.

In the capital cities, new listing volumes in October were at their highest level for a decade, according to PropTrack data released Tuesday (12 October).

Buyers with more choice is equating to a softening of national property price growth and slight declines in some markets.

Among the biggest state capitals, this has been most evident in Sydney and Melbourne.

Melbourne had record-high new listings for the month of October, while Sydney had its highest October volume of new listings in nine years. Canberra also hit a new listings record.

The Sydney and Melbourne listings leaps are all the more notable for eclipsing the heightened new listing volumes this time last year, while Perth, Canberra and Brisbane saw the largest annual increases.

Cameron Kusher, REA Group Director of Economic Research, said buyers across Australia enjoyed greater choice in October, with all markets recording a monthly jump in new listings and most markets proving far busier than at the same time last year.

“As new listing volumes have surged, total listing volumes have also increased. They’re up 8.7 per cent year-on-year and at their highest point since November 2020.

“Heightened levels of stock for sale affords buyers more choice and removes some purchasing urgency from the market, so we’re seeing a more balanced dynamic emerging between buyers and sellers than we have in recent years, with conditions quite favourable for purchasers in cities like Sydney and Melbourne.

“A range of factors may have led to the strong growth in new listings, such as recent price gains enabling some homeowners to upgrade, while prolonged high interest rates may be prompting others to sell.”

All capital cities recorded a monthly increase in new listings and each of these markets except Darwin recorded growth in new listings year-on-year.

Brisbane and Hobart hit their highest volume of new listings for October in six years, Adelaide its highest October volume in five years while in Perth, it was the strongest October for new listings in a decade.

Sydney suburbs to watch and avoid

The decline in Sydney’s monthly median dwelling value in October marked the first retraction since January 2023 and signals a pivotal moment in the housing market.

The New South Wales capital is undergoing a transition that is creating very mixed prospects for different parts of the city’s property market.

That increase in supply highlighted by Tuesday’s listings data was reflected in the areas identified as having the best prospects, and those perhaps best left alone, by Allen Habbouchi, Head of Project Sales and Distribution, aussieproperty.com.

Outer suburban areas were among those he saw as declining in the year ahead.

“Parramatta, once a hotspot, has seen price corrections after rapid growth during the pandemic, while Blacktown is facing increased supply and shifting buyer preferences that is leading to a decrease in property values.”

He said investors and those looking for capital growth during a period of market transition would find in inner-city locations the most resilient.

“Surry Hills maintains strong demand due to its vibrant culture and proximity to the CBD while Paddington continues to attract affluent buyers, supported by its desirable lifestyle and historic character.”

Mr Habbouchi said promising real estate investment areas for 2025 were Marrickville and Crows Nest.

“The former is known for its community vibe and amenities and is expected to remain popular with young families and professionals, while the latter is benefiting from ongoing infrastructure developments and its appeal as a residential hub that is likely to sustain continued demand.”

Perth, Melbourne housing supply evolving

In Perth, where property price growth continues to lead the country at 1.4 per cent last month and 22.6 per cent annually, the list increases could take at least some of the steam out of that market.

Chris Hinchliffe, Director, Herron Todd White (HTW), said the engine room of that growth – the outer suburbs – was seeing a major lift in listings.

“Moving further away from the CBD, there is a plethora of options now for first home buyers and others seeking an affordable investment option, as spring has seen listings start to increase, which coincides with a reported reduction in investor activity as rents have stabilised for the time being.”

Melbourne’s success at delivering new housing over the past ten years has had the effect of suppressing property prices.

Gary Brinkworth, CEO, HTW, said sales activity remains relatively robust in Melbourne, with its proportion of transaction volumes remaining similar to those for Brisbane, Adelaide and Sydney.

“So, it isn’t inactivity that’s impacting prices,” he said.

“Recent reports indicate Melbourne has created more new housing in the past 10 years than other capitals, and that higher density as a proportion of all housing has increased too.

“This would suggest demand for certain types of accommodation is being satisfied by supply, which would result in softer price movement.

“Overall population growth in Victoria has remained comparable to other states and territories, fuelled in large part by new overseas arrivals but, of course, a recently announced federal-level cap on international student visas in 2025 could dramatically impact this.”

Meanwhile, Victoria’s net interstate migration is flat – not a great outcome for housing demand but it is a move away from the negative NIM of recent years.

“I’d suggest Melbourne’s property price is unlikely to quickly bounce back towards long-term relative norms compared to other capitals.”