The first half of March – Australia’s traditional peak property listing period – has seen a significant decrease in new listings this year, as sellers err on the side of caution.

According to CoreLogic, the number of new listings added to the market in Week 11 (March 11-19) dropped by 27.3% compared to the same time in 2022 and by 21.3% below the previous five-year average.

Overall, new listings in 2023 have been tracking 18.0% below the previous year’s levels.

Listings provide a useful real time indicator of seller sentiment and general market confidence.

CoreLogic Asia Pacific Research Director Tim Lawless said sellers were hesitating before listing and the trend was moving lower again with the flow of new listings consistently below average since spring last year.

This decline in fresh stock added to the market likely played a key role in supporting housing values.

In the past month, CoreLogic data showed that in some cities, a lack of new stock has stemmed the decline in values.

Sydney’s housing values increased by 0.9% in the past 28 days, while the volume of new listings fell almost 40% year-on-year.

Melbourne, Perth, and Brisbane experienced similar trends with housing values edging slightly higher or steadying.

Historically, Weeks 9 to 11 marked the seasonal high point in the flow of new listings before the trend eased, leading into Easter and the cooler months.

However, activity across the CoreLogic platform, where real estate agents generate reports to prepare properties for sale, had consistently tracked below levels of the past two years and trended downward.

The year-to-date saw 14.9% fewer real estate agent reports generated compared to the same time last year.

Most regions in Australia recorded a lower than normal number of fresh listings, especially the largest capitals.

Sydney, Melbourne, and Brisbane experienced the most significant drops in new listings.

Sydney’s new listings were 13.2% below the previous five-year average and almost 23% lower than a year ago.

Melbourne’s new listings were down by 12.3% and 23.4% compared to the previous five-year average and last year, respectively.

Brisbane’s new listings were 17.8% lower than the previous five-year average and almost 20% lower than a year ago.

Prospective vendors in these cities seemed to wait out the downturn, preferring to hold off on selling decisions until conditions improved and more certainty returned to the market.

In contrast, Hobart, Darwin, and the ACT bucked the trend of lower listings during the first 11 weeks of the year.

Hobart’s new listings were up 6.2% on the previous five-year average and 8.9% higher than the same period in 2022.

Darwin’s new listings were 7.5% higher than average but almost 20% lower than a year ago.

The ACT saw a 2.0% increase in new listings compared to the average but an almost 11% decline from a year ago.

The ebb and flow of new listings were expected to be a key factor in the performance of the 2023 housing market.

Since September 2022, there has likely been an accrual of pent-up supply as prospective vendors delayed selling decisions.

This delay may have frustrated buyers with a shortage of options.

A rebound in new stock on the market could trigger renewed downward pressure on housing values unless it was absorbed by an increase in buying activity.