Key points
  • Capital city listings hit a seven-year high, giving buyers more choice.
  • Sydney, Brisbane and Canberra are leading the shift towards more balanced market conditions as supply rises.
  • Distressed listings remain low, with no sign of widespread forced selling.

Homebuyers are finding themselves in a stronger negotiating position as a surge in homes for sale coincides with another month of interest-rate stability.

Domain's July Market Insights report found total housing supply across the combined capital cities reached its highest level in seven years, while new listings hit a record high for the month of July as more vendors brought properties to market.

The Reserve Bank of Australia's decision to keep the cash rate unchanged at 4.35% is expected to leave borrowing costs broadly steady, with the average rate for a new owner-occupier home loan around 6.25% a year.

Read more: RBA August Cash Rate Decision

The combination of rising stock levels and stable interest rates is giving buyers more breathing room after years of intense competition, although market conditions remain highly varied across the country.

Domain's chief residential economist Dr Nicola Powell said the market was gradually becoming more favourable for buyers, although conditions still varied between cities.

"Total supply climbed to a seven-year high across the capitals, giving buyers more choice and creating a more competitive environment for sellers," Dr Powell said.

The number of homes available for sale across Australia's capital cities has steadily increased throughout the year, creating a considerably different market from the supply-constrained conditions seen during the pandemic-era property boom.

The growing pool of listings is also increasing competition among sellers, particularly in cities where affordability pressures and higher borrowing costs have weakened buyer demand.

A two-speed housing market emerges

Australia's housing market is heading in different directions.

In Sydney, Brisbane and Canberra, rising supply is giving buyers more choice and more room to negotiate. Homes are taking longer to sell, vendor discounting is increasing, and sellers are facing stiffer competition.

But more listings are not translating into softer conditions everywhere.

Perth recorded the biggest jump in stock nationally, with listings soaring 52.7% over the year.

Yet Domain said the market continues to outperform historical norms thanks to strong demand and an exceptionally tight rental market.

Adelaide is also bucking the trend. Despite a slight monthly fall in listings, demand continues to absorb new supply, helping maintain some of the strongest selling conditions in the country.

Total listings growth by capital city (all property types)

City

Monthly change

Annual change

Perth

23.9%

52.7%

Brisbane

18.3%

38.3%

Melbourne

3.4%

11.3%

Canberra

1.6%

15.9%

Sydney

2.6%

16.4%

Adelaide

-0.6%

13.5%

Hobart

-0.9%

-8.1%

Darwin

-6.9%

-8.0%

Source: Domain

No flood of forced sales

Rising listings are not being accompanied by a spike in distressed sales.

Domain said distressed listings remain historically low, even as total housing supply across the capitals climbs to a seven-year high.

The data suggests sellers are contending with weaker demand and rising competition, rather than a wave of mortgage stress-driven sales.