Australia's housing market is splitting in two: listings in Sydney and Melbourne have climbed to near multi‑year highs, cooling auctions there, while Perth, Brisbane and Adelaide are seeing rising prices as supply remains tight, according to SQM Research.
Market split: two storylines
Australia's housing market is diverging: listings in Sydney and Melbourne have climbed sharply, while Perth, Brisbane and Adelaide are recording rising values. Preliminary weekend auction results for the two largest capitals again came in below recent norms, pointing to likely weaker final clearance rates.
Those clearance figures are a short-term indicator of buyer behaviour. In Sydney and Melbourne the number of homes for sale has climbed sharply, giving buyers choice and time to wait. In Perth, Brisbane and Adelaide the opposite is happening: listings are scarce, competition is tight and buyers keep bidding.
Other parts of the country continue to record stronger growth, particularly Brisbane, Adelaide and Perth. For the mid-sized capitals, they are starting from stronger positions with higher price growth and tighter supply.
Why supply is the driver
Supply is the quantity of homes available to buyers; economists define it as the amount sellers are willing to offer at different prices, shaped by costs, regulations and producer incentives. When supply falls relative to demand, prices tend to rise; when supply rises relative to demand, prices tend to fall.
That framework helps explain the divergence. In Perth, Brisbane and Adelaide the pipeline of listings has tightened. With fewer properties available, buyers are pushed into competition — and that 'fear of missing out' feeds higher bids. Despite the Reserve Bank's monetary tightening, those markets remain supported by underlying demand and tight supply.
By contrast, Sydney and Melbourne show a wide selection of homes for sale. SQM Research data indicates listings in those two cities are near multi-year highs. An abundance of stock lets buyers be choosy and reduces the urgency to bid, especially as mortgage costs are higher than a year ago.
How other forces interact with supply
Supply doesn't act alone. Several non-price factors shift the supply curve and determine how much new housing reaches the market:
- Construction costs and labour availability
- Planning and zoning rules
- Stamp duties and tax settings affecting seller incentives
- Developer margins and new building technology
- Short-term shocks such as input-price spikes or local economic changes
Where supply has tightened, buyers keep bidding; where it has loosened, buyers slow down. That's the arithmetic shaping current price moves.
Regional detail and buyer sentiment
Perth, Brisbane and Adelaide are starting from stronger positions on price growth and tighter supply. That combination has sustained momentum even as national interest-rate settings have risen. Sellers in those markets face less pressure to discount; buyers face more competition.
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Rising listings in Sydney and Melbourne point to softer auction outcomes and likely weaker clearance rates there, while tight supply in Perth, Brisbane and Adelaide should keep prices supported.
This article was created with AI assistance.
