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Among capital cities, Sydney recorded the second-largest annual increase in total listings, behind Canberra. Pixabay

The property market in Australia saw a slowdown in December, with new listings dropping 65.9% month-on-month. However, the month still recorded the highest number of December listings in the past six years, offering homebuyers more choices and hope.

According to PropTrack's latest Listings Report, released Tuesday, December's performance marked an improvement over the 69.1% drop recorded in December 2023. Despite the usual end-of-year slowdown, total listings in December reached their highest volume since 2018, News.com reported.

"December typically sees a significant drop in listings as people avoid selling during the holiday period when many are away, and buyer activity is subdued," Cameron Kusher, PropTrack's director of Economic Research, said.

The report also highlighted strong growth in total listings across major capital cities. Sydney, Melbourne, and Perth saw increases of 12.7%, 8%, and 5.9%, respectively. Among capital cities, Sydney recorded the second-largest annual increase in total listings, behind Canberra.

In regional New South Wales (NSW), December saw the highest volume of total listings since 2019. While new listings fell by 36.4%, total listings were up by 9.8% compared to December 2023. Kusher noted that regional NSW remained a key area of interest, with more listings available than a year ago.

Victoria also saw notable activity, particularly following the state government's decision to increase taxes on investors. This policy change led some investors to offload properties, contributing to the overall growth in listings, Realestate.com reported.

"Capital city prices have increased substantially, making them less accessible for many buyers – in contrast, regional markets remain relatively affordable, which has kept demand metrics stronger there," Kusher pointed out.

Factors driving an increase in listings

Kusher pointed out that the higher volume of listings was contributing to reduced competition and slower price growth. He identified three key factors driving the increase in listings:

Upgrading demand: Many homeowners are now looking to upgrade to larger properties.

Equity gains: Strong price growth in recent years has helped homeowners build significant equity, motivating them to list their properties.

Impact of higher interest rates: With interest rates rising, some homeowners who overextended themselves when rates were low are now struggling to afford their properties and are opting to sell.

Looking ahead to 2025

Looking forward to 2025, Kusher predicted a tougher market for sellers, especially in Sydney and Melbourne. With higher stock levels and slowing price growth, sellers will face more competition, likely to result in price reductions for those eager to sell.

Kusher also acknowledged that while significant policy changes, such as replacing stamp duty with a land tax, could help improve the market, such changes are unlikely before the federal election.