Clearance rates and withdrawal figures point to a market in transition
Australia's housing market is showing signs of a shift in favour of buyers, with total listings rising for the fifth consecutive month to their highest point since mid-2019, according to Domain's Market Insights for May.
New listings declined month-on-month but remained at the strongest level on record for this time of year, suggesting vendors are bringing properties to market earlier in anticipation of moderating price growth. The result is greater choice for buyers and reduced competition at auction.
Clearance rates across the combined capital cities fell to 54.7%, the lowest May result since 2019. Withdrawal rates rose to 16.5%, the highest level since the pandemic-era disruptions of early 2020, as sellers adjusted their expectations.
Sydney and Melbourne are leading the shift to a buyer's market. Brisbane is showing a similar pattern, with record May listings, multi-year-high total supply, and clearance rates at their lowest for this time of year since 2019.
Adelaide stands apart, remaining the only capital city where conditions continue to favour sellers, with improving clearance rates and time on market at historical lows.
Regional markets are softening more quickly than capital cities as pandemic-driven demand unwinds. Clearance rates fell to 43%, the lowest May result since 2020, while withdrawn listings rose to 20.9%.
"Listing activity is seasonally strong for this time of year, which suggests some sellers are bringing their homes to market earlier, likely to get ahead of a further slowdown in price" said Nicola Powell (pictured right), chief residential economist at Domain. "At the same time, buyers aren't moving with the same urgency because they're more cautious, have more choice, and are taking longer to commit,
"We're already seeing this shift in buyer behavior reflected in the data, with softer clearance rates, and more properties being withdrawn as sellers adjust expectations."
"In regional markets, that shift is happening even faster. Many of those areas saw very strong growth during the pandemic, and now we're seeing demand normalise, particularly as affordability pressures continue to build."
Powell said that overall, the market was moving through a clear inflection point. "Supply is rebuilding, buyers are regaining some power, and that sense of urgency that defined the market over the past few years is starting to ease," she added.
"What happens in the second half of the year will really come down to how these dynamics play out, particularly the balance between supply, demand, and household confidence."
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