Busiest start in more than a decade for the housing market

The property market records its highest number of new listings in more than a decade as sellers become more confident that RBA rate hikes are done and cuts are on the way.

February saw the most new property listings in capital cities since February 2012. Picture: Max Mason-Hubers/NCA NewsWire

Australia’s property market is off to its strongest start in more than a decade as increased confidence about the end of RBA rate hikes and the prospect of cuts entices more sellers to list their homes.

Data from PropTrack shows that in the capital cities, there were 22.2 per cent more new listings year-on-year in February, and a 32.4 per cent rise from January, to mark the best February since 2012.

Nationally, new listings were 16.6 per cent higher than a year ago.

The growth in homes being put on the market is being driven mostly by Sydney, Melbourne and Canberra where new listings were up between 32 and 35 per cent, compared to sluggish growth in other capital cities. Listings were down year-on-year in Darwin and flat in Adelaide and Perth.

The period after Australia Day in late January through until Easter is regarded as one of the busiest periods of the year for listings with only spring typically a more popular time.

This followed a period in 2023 of more-normal spring activity than was the case in 2022, when activity was fairly quiet as a result of the most aggressive run of rate rises by the Reserve Bank on record.

PropTrack senior economist Angus Moore told The Weekend Australian that sellers were more comfortable about listing their home due to the outlook for interest rates along with favourable conditions for the housing market.

Buyers and sellers are flocking to the market ahead of expected rate cuts later this year. Picture: Max Mason-Hubers

“Sellers and buyers are more confident about the outlook for interest rates, with expectations of no more rate hikes and even cuts later in the year underpinning the confidence in the market,” he said.

“The fundamentals are also solid with unemployment still very low, income growth picking up and there is a lot of demand as a result of the rental market being crazy and strong levels of migration.”

The RBA is not expected to increase the cash rate from 4.35 per cent when it meets for the second time this year over Monday and Tuesday. Economists are of the view that cooling inflation coupled with a broader slowdown in the economy will allow the central bank to cut rates potentially several times from the back end of 2024.

The total number of properties listed for sale in Sydney, Melbourne, Canberra, and Hobart were well above the prior-decade average, compared to Brisbane, Perth, and Adelaide where volumes were about 40 per cent below.

Mr Moore said an increased volume in listings could help to spread the buyer pool across more properties and limit growth, but the prospect of looming cuts was more likely to offset that.

“A more stable outlook for rates and even cuts should be a tailwind for prices this year.”

PropTrack economist Angus Moore says the fundamentals are solid for the housing market.

PropTrack earlier this month reported that national home prices lifted 0.45 per cent to a record high in February, which was the largest monthly increase since October 2023. Prices in Brisbane and Adelaide were 60 per cent higher than before the pandemic and 16.5 per cent above March 2020 levels.

Regional areas were a little quieter with February broadly in line with the pace of activity that had been typical for February regionally over the past decade. Even so, the number of new listings regionally was up 7.8 per cent year-on-year in February.

Listed property groups REA Group, majority-owned by News Corp Australia, and Domain Holdings reported during February half-year results that new home listings were beginning to recover in Sydney and Melbourne as confidence returned, but cautioned that Brisbane and other cities remained slower due to elevated levels of mortgage rates.

Originally published as Busiest start in more than a decade for the housing market