House price growth to soften as listings rise faster than demand

“I can see the first half of 2024 potentially a bit weaker for capital growth, particularly in Sydney and Melbourne, as more vendors come into the market than buyers.”

Total listings continued to trend higher across Sydney and Melbourne in the four weeks to December 3, with overall stock jumping by 10.7 per cent and 7.6 per cent, respectively.

“Total stock levels have been rising in those markets since June, indicating purchasing demand isn’t quite keeping pace with the rise in listings, and probably contributing to sharp slowdown in prices and even declines in some areas,” Ms Owen said.

“Demand has been softer due to higher interest rates and low consumer sentiment, which make people wary of buying at such high prices.”

The persistent lift in total stock since June has coincided with the slower growth in home values nationwide.

Last month, CoreLogic’s national home value index rose by just 0.6 per cent, which is the smallest monthly gain since the recovery started in February.

Sydney increased by just 0.3 per cent, down from the 1.8 per cent peak in May, while Melbourne fell by 0.1 per cent, its first negative growth since the upturn started.

Those who can afford to buy could be in a rare position to negotiate a good deal after total listings more than doubled across 67 suburbs nationwide, albeit from a low base, Ms Owen said.

Total stock levels climbed by more than 100 per cent in Sydney suburbs Oakville in Baulkham Hills district, Longueville on the lower north shore, Banksmeadow and South Coogee on the eastern suburbs, Brookvale on the northern beaches, Constitution Hill in Parramatta and Denistone West in Ryde district.

Oakville posted the sharpest increase, with total stock surging 188 per cent over past year and lifted 248 per cent higher than the previous five-year average.

Buyers also have more options across Adelaide suburbs Leabrook and Wayville, where total listings jumped by 700 per cent and 200 per cent, respectively.

Stock levels have also more than doubled in the Adelaide suburbs of Woodville Gardens, Woodforde, Urrbrae, Reynella East and North Brighton.

In Melbourne, total listings in Eynesbury increased by 161 per cent compared with a year ago and lifted by 46 per cent above the five-year average.

“There are definitely areas that are becoming over-supplied and have more than enough property on the market to give buyers a bit more leverage and bring prices down,” Ms Owen said.

“In these areas, market conditions are now in favour of buyers as higher stock levels provide more choice, less urgency and greater opportunities to negotiate.”

Over the past three months, house prices in Banksmeadow had dropped by 4.1 per cent, Longueville fell by 2.6 per cent, Eynesbury by 0.3 per cent and Woodforde by 2.4 per cent.