The number of new listings hitting the market in December fell 31.1 per cent compared with November, according to the latest update from SQM Research.
Total new listings across the 12 months ending December 2022 also fell, dropping 22.4 per cent over 2021 levels.
SQM defines new listings as properties that have been on the market for 30 days or less.
Darwin recorded the largest drop in new listings in December (down 52.8 per cent), followed by Sydney (down 49.5 per cent), Canberra (down 45.2 per cent), Melbourne (down 43.7 per cent) and Brisbane (down 40.7 per cent).
The remaining capital cities recorded smaller declines: Hobart down 37.1 per cent, Perth down 35.3 per cent and Adelaide down 30.2 per cent.
SQM Research Managing Director Louis Christopher said while the decline in new listings might appear alarming at surface level, there was little cause for concern at this stage.
That was because 2021’s property market performance should be treated as an outlier, rather than a benchmark for future performance.
“The large falls in new listings over December 2022 appears to be an eye-opener, but in the
scheme of things, we have just gone back to more normal levels for December,” he said.
“This time last year was a frantic period given the opening of the economy and abnormally high buyer activity all the way through to the end of the year.”
A rise in the number of older listings – defined by SQM as those that have been on the market for 180 days or longer – had led to an increase in total listings across 2022, Mr Christopher said.
The 14.3 per cent increase in older listings in 2022 (now up to 58,899 dwellings) appeared to be uniform across capital cities and could be an indication of a cooling market, Mr Christopher said.
“This rise in older stock completely confirms the depth of this housing downturn and is very typical of what is recorded in past downturns,” Mr Christopher said.
“As there remains more sellers than buyers, dwellings on the market that are not priced to market, don’t sell.”
Despite this, there was little sign that rising interest rates and economic uncertainty had reached the level where home owners were forced to consider selling up, Mr Christopher said.
He said that distressed listings activity, while up 2.9 per cent in 2022, had dipped by 5.3 per cent in December and still remained at “relatively benign” levels.
SQM Research recorded 6210 dwellings as having sold under distressed conditions in 2022.
“This remains well down on pre-Covid levels over approximately 13,000 dwellings,” Mr Christopher said.
These figures would need to be far higher for their to be a risk of a housing crash in 2023, he added.
“Until we see a major surge on distressed activity, I really doubt some of the more calamitous
predictions of a housing crash in 2023 will play out,” he said.
This could change if the Reserve Bank of Australia exceeds expert predictions and raises the cash rate by more than 4 per cent in the months ahead, he said.
