Number of homes listed for sale increases in most capitals

Most capitals report a rise in homes listed for sale, as buyers pause and properties languish on the market.

A “for sale” sign on a house in Sydney. Picture: Bloomberg

The number of homes listed for sale in Melbourne has surged 25 per cent in March compared with a year ago, leading a rise in properties flowing on to the market in all but one capital city.

Nationally, homes advertised for sale increased 4.8 per cent to just over 343,000 properties from March last year, as properties languished on the market and tight lending conditions hampered buyers, according to SQM Research.

The upcoming federal election and the winding back of the negative gearing tax break, if there is a change of government, has also led buyers and sellers to delay decisions, slowing market activity.

All capital cities saw a rise in listings over the month, with Melbourne the highest with an increase of 8.3 per cent, followed by Canberra at 6.3 per cent and Sydney with 5.9 per cent.

Canberra was another city to record a big jump in the number of homes on the block, with a 21.4 per cent lift over the year to the end of March.

Darwin recorded the lowest increase, at 2.5 per cent, and was the only capital to record a fall in homes for sale over the year, with a drop of 2.2 per cent.

SQM Research managing director Louis Christopher said the rise in properties for sale was largely due to homes languishing on the market.

“While new listings did increase over the month, very low sales rates are exacerbating the overhang of older listings,” Mr Christopher said. “Overall, the weight of listings continues to put downward pressure on asking ­prices as vendors keep adjusting their asking prices in order to meet the market.”

Capital city asking prices fell 0.3 per cent for houses and 1.2 per cent for units in March, SQM found.

Melbourne, Brisbane and Adelaide all saw asking prices fall for houses and units.

In Sydney the average asking price for houses was steady at $1.23 million, but fell 1.7 per cent to $690,000 for units.

Capital city asking prices also fell compared with a year ago, down 7.3 per cent for houses and 3.4 per cent for units.

Last month SQM said federal Labor’s proposed windback of negative gearing tax breaks would cause already nervous investors to desert the property market, sending prices falling further in most cities between next year and 2022.

Under the researcher’s best-case scenario, housing prices would drop a further 4-8 per cent over a three-year period from 2020 to 2022, assuming an interest-rate cut of 50 basis points by early January next year.

Property sales turnover was predicted to fall another 8-15 per cent by 2022, SQM said.

Researcher CoreLogic found housing prices around the country fell 6.9 per cent in the year to March 30, with Sydney and Melbourne hardest hit with drops of 10.9 per cent and 9.8 per cent respectively.

CoreLogic continues to expect Sydney and Melbourne to be hardest hit and has maintained its forecast of an 18-20 per cent fall in prices for Sydney from the height of the market in 2017 to the ­bottom, most likely next year, with Melbourne to closely follow, and weak markets in other ­capitals.