Property price rises ease as new listings hit the market

Home prices are still on the rise, but there are indications that the heat is coming out of the market, new research released by PropTrack has revealed.

Over the course of September home prices edged up by just 0.04% across the country, though that was enough to ensure that Australia's median home value rose to a record-high $792,000, according to the latest PropTrack Home Price Index.

The rate of monthly growth in national home prices had been as high as 0.45% back in March, but in the months since it has steadily eased off.

Eleanor Creagh, senior economist at PropTrack and author of the report, says that one of the reasons behind the recent cooldown in prices is an increase in listings coming on the market.

"We've seen the upswing in national home prices continue in September, although growth has slowed in most markets with buyers enjoying a lot more choice during this busier spring selling period.

"We actually saw that in Sydney, Melbourne and Canberra, buyers enjoyed the most new listings for an August in over a decade.

"So a continued uplift in the number of new properties hitting the market in those capital cities during September has really provided much more choice for buyers and contributed to the slowing pace of high price growth."

Which markets are rising and falling?

That's at the national level, but zeroing in on the capital cities, property prices in some markets are continuing to climb higher, while they are retreating in others.

"We have seen significant price divergence across the various capital city markets, which is a trend that has continued for much of the past year," Creagh explains.

"Capital cities like Perth, Adelaide and Brisbane, have recorded a much stronger pace of price growth which is a trend that continued into September.

Perth has led the way for home price growth, with PropTrack recording a 0.24% increase during September and a 22.34% increase over the past year.

Adelaide notched the highest increase during September (0.53%), adding to its 15.05% growth rate over the last year, while home prices in Brisbane rose by 0.20% during September and 13.31% annually.

"Now, compare those to the capital city markets where price momentum has been consistently weaker, like Melbourne and Hobart. We saw prices fall 0.3% in both markets in September, and prices are down 0.95% over the past year in Hobart and down close to 2% over the past year in Melbourne," Creagh says.

"So it's a multi-speed market when we look at the pace of home price growth across the capital cities, and it's really clear that that varied pace of price growth is, to a degree, being driven by varied supply and demand conditions across each of those capitals."

Are things looking brighter for buyers?

With listings on the rise and prices either relatively stable or falling in some cities, some prospective buyers will be wondering whether now is the time to make a move.

The reality is that that will likely come down to the situation in each individual market, and the markets within those markets.

Michelle May, principal at Sydney-based firm Michelle May Buyers Agents, has seen the situation improve slightly for prospective buyers in some parts of Sydney compared to a few months ago.

"We've come out of a really scarce period in terms of what has been available for sale. And whilst stock has increased, there's always a deficit between supply and demand - although, it's a different equation in the apartment market," she says.

"What I am seeing is a lot more properties being passed in and then selling afterwards. So I think that buyers are pushing back.

"I've seen a few properties where the vendors just haven't been realistic, potentially because they are overcapitalised and finding it hard to pay their mortgages. Buyers just aren't prepared to pay that much though, so after a bit of toing and froing buyers may be able to get some good deals."

May says that buyers are likely see a drop-off in listings in the next few weeks though during the school holiday period, but thinks that the amount of choice will improve again afterwards.

"If buyers are wondering what's happened with the number of listings, that is why. So don't despair. Just keep looking and know that in the next couple of weeks, once the holidays are over, things will pick up again - there's no doubt about it."

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