The cities where homebuyers now have an advantage - realestate.com.au

Recent shifts in the Australian property market have granted homebuyers a notable advantage, as conditions have cooled and the number of available properties has increased significantly. This trend marks a departure from the competitiveness seen in the past two years, providing buyers with a broader selection of homes.

The spring market has seen a quieter atmosphere, which has opened up opportunities for those ready to make a purchase. Although new property listings in October were down by 13% compared to the same month last year, the overall inventory of homes for sale has risen, leading to reduced competition for buyers. According to the latest Market Snapshot from realestate.com.au, the decline in new listings was primarily observed in major cities such as Sydney, Melbourne, and Canberra.

In contrast, other cities have experienced a surge in new listings. For example, Perth saw a 17% increase in new listings, while Adelaide and Darwin reported rises of 12% and 8%, respectively, compared to October of the previous year. Overall, the total number of homes available for sale across Australia has risen by 9% from last year, reaching levels not seen since late 2024.

Notably, certain cities have experienced a much larger increase in available homes. Adelaide, for instance, has 45% more homes on the market than a year ago, while Perth's inventory has grown by 42%, and Brisbane has seen an increase of approximately 40%. Angus Moore, a senior economist at realestate.com.au, highlighted that the increased inventory is due to both prolonged sales times and a greater influx of new listings compared to the previous year.

The heightened availability of homes and a decline in buyer demand have contributed to a less competitive environment for homebuyers. Moore noted that Brisbane, Perth, and Adelaide have experienced some of the most significant monthly price drops in October, with the downturn in prices in Perth and Brisbane nearing that of Melbourne.

Investor interest in the market has also waned, influenced by recent interest rate hikes and alterations to tax concessions. According to data from the Australian Bureau of Statistics, investor loans fell by over 30% in the September quarter, with South Australia experiencing a drop of 35%, Queensland 37%, and Western Australia 40% compared to the previous quarter. Dr. Mish Tan, head of finance statistics at the ABS, indicated that the decrease in lending activity is particularly pronounced among investors, affected by not just rising borrowing costs but also potential tax changes and expectations of declining property prices.

Despite the reduction in investor activity, first-time homebuyers have not fully stepped in to fill the gap. The data shows a 15% decline in new loans to first-home buyers compared to the previous quarter. In Perth, for example, property prices have dropped by 5.7% from their peak in March of this year, according to the realestate.com.au Home Price Report.

Peter Gavalas, a buyer's agent in Perth, remarked that the increased number of available homes has given buyers more options, but falling prices have made some first-home buyers hesitant, fearing negative equity. He noted that while there are many potential buyers, they are taking longer to make decisions, feeling less urgency due to the broader selection of properties available.

Gavalas pointed out that there has been a noticeable influx of homes priced under $1 million, yet many first-time buyers remain cautious. He believes that the current market conditions present an excellent long-term buying opportunity for them. Conversely, homeowners looking to upgrade to larger or more valuable properties are actively participating in the market, taking advantage of the current conditions.

However, the situation is markedly different in Australia’s two largest cities, where fewer homes have been listed this year amid falling prices. Moore noted that both Sydney and Melbourne have seen significant declines in new listings, down 28% and 26% year-on-year, respectively. This trend contrasts sharply with last October when listings surged to a decade-high as buyers sought to capitalize on record property values.

Property values in Sydney have decreased by 6.6% since last year, while Melbourne has seen a decline of 6.1%. Moore attributed this slowdown to a combination of five interest rate increases and changes in federal housing tax policies, which have impacted borrowing capacity and buyer demand.