PropTrack reports Rise in new listings buoys housing market
Australians are increasingly taking their homes to market on the expectation that interest rates will begin to fall and current housing demand will give them the cash they need to upgrade.
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Renewed confidence that the Reserve Bank has finished lifting interest rates, along with strong demand from buyers, is seeing a surge in the number of sellers putting their homes on the market.
Data from PropTrack shows that in the capital cities there was a 6.5 per cent rise in new listings in May compared to the previous month – the best May for active listings since 2020 – and 18.5 per cent higher than a year ago.
Now past the seasonal impacts from shifting Easter timing, new listings in May displayed the strength seen earlier in the year to be 12.6 per cent higher over the calendar year to date compared to the same period in 2023.
The growth in homes being put on the market is being driven mostly by Sydney, Melbourne and Canberra where new listings were up between 30 and 42 per cent. New listings were higher year-on-year in all other capitals except Hobart.
The rebound in listings comes after a poor period of activity between 2022 and 2023 when the Reserve Bank undertook a series of rapid fire rate hikes which saw the cash rate climb from 0.1 per cent in May 2022 to 4.35 per cent in November.
PropTrack senior economist Paul Ryan told The Australian there had been a sharp increase in confidence in the housing market due to both the interest rate outlook and favourable conditions.
“Even though there are higher interest rates, sellers are recognising that the equity that has built up in their homes is enabling upgrades. That’s one of the key things we’re (seeing) in Sydney and Melbourne, which have seen big increases in activity this year.”
The RBA is not expected to increase the cash rate from 4.35 per cent when it meets next Monday and Tuesday.
ANZ this week was the first of the major banks to rule out the prospect that the RBA will lower rates this year – pushing out its timeline from November to February 2025.
Mr Ryan said that if the time frame for rate cuts was extended it was unlikely to turn the direction of the housing market given the fundamentals remained strong and both buyers and sellers were feeling optimistic.
“We’ve had a period of seven months where rates haven’t moved so a buyer is getting a pre-approval and its staying the same from month to month, or they feel that repayments are not likely to keep climbing,” he said.
“And from sellers’ perspective, we’ve seen solid transactions, prices are still growing, auction clearance rates are still strong. A well presented property is very likely to sell, it’s likely to attract a few buyers, and although affordability is really constrained by higher interest rates that increase in stock itself brings more buyers in.”
New listings in the combined regional markets were 7.5 per cent higher over the month and up 10.4 per cent on the year, with only regional WA and regional NT recording a year-on-year decline.
This higher rate of new listings resulted in more total listings – both new and old – than a year ago for all capital city markets except Brisbane, Adelaide and Perth, where demand remained extremely strong. Perth had 23.4 per cent fewer properties for sale than in May last year.
PropTrack this month reported that national home prices revealed a 0.3 per cent lift in prices nationally in May, led by the smaller capitals.
However, the pace of home price growth has slowed since summer in every capital city as the market enters traditionally the quietest time of year
Brisbane had the second highest median dwelling price in the country at $837,000 – the first time it has done so since 2009. It comes as new listings were up 6.4 per cent month-on-month in May, but total listings were down 3.4 per cent.
Mr Ryan said demand was likely to outstrip supply with expectations that interest rates were likely to remain stable, which would see home prices continue to rise but at a slower pace than in previous years.
“This is partly due to rate cut expectations being pushed out and partly because affordability continues to constrain lots of buyers,” he said.
“So all the preconditions for seeing a continuation of current conditions remain.”
Originally published as PropTrack reports Rise in new listings buoys housing market
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