Property listings off but the drivers of demand for housing remain, says PropTrack

Low unemployment is helping to buoy the market in the face of mortgage rate rises.

The total number of properties listed for sale on realestate.com.au in January was down 0.3 per cent month on month.

New listings of homes across the country are running below the elevated levels of last year but a fresh PropTrack analysis says that the longer-term drivers of housing demand continue to be solid.

Prospective buyers are being weighed down by interest rate rises and more stringent lending criteria imposed by banks, as well as the prospect of an economic slowdown looming over the market.

This has dampened the outlook but the analysis pointed to the positive employment fundamentals as a driver.

PropTrack economist Angus Moore said activity across Australia’s property markets resumed in January after the usual end-of-year break paused selling campaigns.

New listings in capital cities almost doubled month on month in January as sellers returned.

“Despite the increase, new listings were still below 2022’s strong levels. Conditions and activity slowed in the back half of 2022 following an extremely busy spring in 2021 which extended into early 2022,” he said.

Home prices nationally declined 0.1 per cent month on month in January and are now down 4.5 per cent from their peak in early 2022.

“Home prices continued to decline across the country in January, though the pace of falls has slowed from what was experienced in mid 2022,” Mr Moore said.

“Those price falls, and the slowing in market activity, have come on the back of the Reserve Bank of Australia raising interest rates at an extremely brisk pace.”

He warned that a tough period loomed but he was optimistic about the longer-term state of the economy.

“The RBA is expected to continue raising rates this year, though there may not be much further to go,” he said. “While selling conditions have clearly softened from where they were in early 2022, and market activity has slowed, the fundamental long-term drivers of demand for housing remain solid,” he said.

Mr Moore pointed to the unemployment rate sitting around multi-decade lows for the majority of 2022, where it has remained for much of the past six months.

“Wages growth, while running slower than inflation, has started to pick up. International migration has also returned, which will further add to housing demand,” he said.

The PropTrack Listings Report found it was a slower start to the year, with new listings down 9.4 per cent year on year nationally.

Most capital cities, including Sydney (-16 per cent), Melbourne (-15.4 per cent), Brisbane (-6.9 per cent), Adelaide (-3.9 per cent) and Perth (-14.9 per cent) had lower listings but Hobart bucked the trend, with new listings up 24.6 per cent on January 2022.

The total number of properties listed for sale on realestate.com.au in January was broadly flat compared with December, down 0.3 per cent month on month.

But choice for buyers has improved compared with a year ago and total listings were up 11.5 per cent year on year.