A surge in listings across some of Melbourne’s inner suburbs could trigger faster-than-expected house price falls, as buyer demand eases amid higher mortgage rates, rising uncertainty and poor affordability, new analysis shows.
Melbourne’s inner areas, the inner south, inner east and the north-east have all posted above-average stock levels in the past three weeks as more vendors decide to cash in, Suburb-trends director Kent Lardner said.
The inventory level in Melbourn’s inner Stonnington West has jumped to 4.6 months after listings climbed by 23 per cent, while stock in Stonnington East has more than doubled to 4.17 months compared to the long-term average, Suburbtrends data shows.
“The inner Melbourne market has swung back in favour of buyers as close to 2.2 per cent of owners have decided to list in recent weeks, which may be a tipping point for these suburbs,” Mr Lardner said.
“In recent months, the Stonnington region has experienced a fall in median prices, which we estimate [to be] a 9 per cent drop . . . in the last 12 months. Unless demand increases, prices may fall further and faster if listings volumes continue to build like this.”
Listings of less than 30 days rose sharply around the country over February, according to SQM Research. Sydney’s new listings jumped 81 per cent while Canberra soared 86.1 per cent. Melbourne’s new listings climbed by 76.7 per cent, Brisbane was up by 51.8 per cent, Adelaide by 53.4 per cent and Hobart by 53.3 per cent. Darwin rose by 71.3 per cent, Perth by 43 per cent and the new listings nationally increased by 62 per cent.
“The upward surge in listings over February suggests some sellers are taking profits after phenomenal price rises were posted in 2021,” SQM Research managing director Louis Christopher said. “We could see the upward trend in listings continue through the first half of the year as more sellers seek to take profits.”
In Melbourne’s inner east, new listings more than doubled to 2488 over the month to February as more vendors entered the market, according to SQM Research data.
“‘been a large pick-up in listings in the area, and we’re now seeing the pendulum swing towards the buyers in this market,” Mr Christopher said.
Stock levels have also risen sharply in Sydney’s inner west, with new listings jumping by 88 per cent in February.
“The stock build-up is likely a reflection of the slower spring season, but also a rise in vendors wanting to sell despite the slowdown in the market,” Mr Christopher said.
But the large rise in listings in the area was unlikely to tip the market towards buyers yet, Mr Lardner said.
“It will improve choices for buyers, but conditions remain red hot in this area, and there’s still strong upward pressure on prices,” he said.
“The Leichhardt region has had a strong imbalance between buyers and sellers for over a year now. Even though listings volumes have increased, the number of buyers appears to be more than a match for the additional supply.
|”Inventory levels still remain low at close to one month. This means if nothing else is listed for sale, in theory we would have nothing available to sell in four or five weeks’ time, so it will take a considerable boost in listings volumes or a large reduction in buyers before we see conditions easing here.”
The Bankstown area in Sydney’s inner south also posted a sharp rise in listings, but it would probably be absorbed quickly, Mr Lardner said.
“Listing rose 21 per cent and prices are levelling out at a median of $1.2 million, however the market is still tipped slightly in favour of sellers,” he said.
