The real estate market is showing signs of slowing but there are still challenging conditions ahead for buyers with a rapid drop in listing volumes.
Ray White Group Chief Economist Nerida Consibee said there were 11,000 fewer homes for sale in the March quarter compared to the same time last year.
“The market is no longer moving so quickly and in some places prices are starting to fall,” she said.
“Last year was the year for sellers, now conditions are more in favour of buyers.
“The problem is that with conditions softening sellers are no longer so keen to go to market.
“This means that although properties may be a bit cheaper it is really hard to find one to buy.”
Buyers on the hunt for a home in Brisbane face the biggest shortage of supply with 3700 fewer properties for sale, followed by Sydney with 2500 less.
Forces driving the market vary from state to state.
“Brisbane is still a strong market while Sydney is looking comparatively weak,” Ms Conisbee said.
“It may be that Sydney sellers are driving the drop in volume by holding off going to market while in Brisbane buyers are snapping up listed properties quickly.”
There is also hesitancy from sellers in Perth because of softening prices in the past quarter.
High migration levels from interstate are likely to be driving the big decline in properties for sale in regional Queensland, where listings are down 560 from the same period last year.
The decline is consistent for houses and units.
The biggest declines by suburb are in precincts most affected by the pandemic such as Melbourne university suburbs Carlton and Clayton and high development areas such as Melbourne’s central business district and Rhodes in Sydney.
Poor tenant and buyer demand through the pandemic have created a 30 per cent decline in rents and prices for units in the Melbourne CBD.
Ms Conisbee predicts with borders open again these suburbs are likely to have reached the bottom of the market.
“The drop in listings could be a sign that investors are seeing value in buying property in these suburbs,” she said.
Housing prices in New Zealand are also softening but that market is facing different conditions.
“In New Zealand listings are increasing as a result of properties not selling. With a lot of people wanting to sell and not much demand from buyers, this suggests greater stress in the market,” Ms Conisbee said.
Ms Conisbee predicted price declines would be much sharper in New Zealand than in Australia in the next 12 months.