Australia’s housing market is showing clearer signs of transition, with rising stock levels meeting more cautious buyer demand and evidence emerging that conditions are gradually tilting back in favour of purchasers.
New market data from Domain shows listings across capital cities have risen for five consecutive months, reaching their highest level since 2019, as more vendors bring properties to market during the usual seasonal selling period.
While new listings eased slightly month-on-month, overall supply remains elevated, suggesting vendors are increasingly seeking to sell earlier as expectations for price growth soften.
The result is a market offering greater choice for buyers, alongside rising pressure on sellers to meet more realistic pricing expectations.
Auction conditions have weakened in line with higher supply, with combined capital city clearance rates falling to 54.7 per cent in May, the lowest result for the month since 2019.
Withdrawal rates have also lifted to 16.5 per cent, indicating more vendors are pulling properties as competition among buyers eases.
Sydney and Melbourne are driving much of the national shift
Sydney recorded its highest level of total listings since 2009 and the strongest May new supply on record, while clearance rates fell to their weakest May result since 2008. Melbourne is also carrying elevated stock levels, with auction volumes recovering but clearance rates easing as the gap between buyers and sellers widens.
Brisbane is following a similar pattern, with record May listings and softer auction conditions, alongside rising withdrawals and weaker clearance results compared with recent years.
Adelaide remains the exception, continuing to lean in favour of sellers, with relatively stronger clearance rates and low time on market pointing to more balanced demand and supply conditions.
Regional markets are adjusting more quickly, with conditions softening as pandemic-era demand unwinds. Clearance rates fell to 43 per cent, the weakest May result since 2020, while withdrawn listings rose to 20.9 per cent, signalling growing caution among vendors.
Domain’s Chief Residential Economist Dr Nicola Powell said the data points to a market moving through a clear adjustment phase as buyers and sellers recalibrate expectations.
“Listing activity is seasonally strong for this time of year, which suggests some sellers are bringing their homes to market earlier, likely to get ahead of a further slowdown in price. At the same time, buyers aren’t moving with the same urgency because they’re more cautious, have more choice, and are taking longer to commit.”
She said weakening auction results and higher withdrawals reflect this shift in momentum.
“We’re already seeing this shift in buyer behavior reflected in the data, with softer clearance rates, and more properties being withdrawn as sellers adjust expectations.”
Dr Powell said regional areas are normalising more quickly following stronger pandemic-era growth.
“In regional markets, that shift is happening even faster. Many of those areas saw very strong growth during the pandemic, and now we’re seeing demand normalise, particularly as affordability pressures continue to build.”
She said the market is now moving through a broader turning point.
“Overall, we’re moving through a clear inflection point. Supply is rebuilding, buyers are regaining some power, and that sense of urgency that defined the market over the past few years is starting to ease.”
FAST FACTS:
Sydney: Biggest supply surge in 15+ years meets cautious buyers
Melbourne: More homes, less competition as market loses momentum
Brisbane: Record listings ease pressure, giving buyers more choice
Adelaide: The only capital city still favouring sellers
Regional Australia: Pandemic boom fades as buyers retreat