Capital city listings hit a 7-year high: what more choice means for first home buyers

Property listings across Australia's capital cities have climbed to their highest level in seven years, according to data covering the four weeks to 18 September. Nationally, listings sat around 18% higher than the same time last year, and the shift is already showing up in how long it takes to sell a home and how much vendors are willing to come down on price. For first home buyers who have spent the last few years competing over a thin trickle of stock, a market with meaningfully more homes to choose from is a genuine change worth understanding.

What the data shows

The national median time to sell a home has stretched to 39 days, up from 28 days at the same point last year. Capital city properties are taking a median of 37 days, against 25 days a year ago, while regional properties now average 42 days. Sydney and Melbourne are both sitting above the national average, with Canberra recording the longest selling times of any capital.

Vendors are adjusting their expectations to match. The typical discount between a home's original asking price and its eventual sale price has widened to around 4% nationally, and slightly more than that across the combined capitals. Analysts covering the data point out that this looks like a genuine cooling in buyer demand meeting a steadier flow of sellers, rather than a wave of distressed or forced sales, since indicators of mortgage stress in the underlying data remain relatively contained.

Why supply is building up

• Homes are taking longer to sell. When properties sit on the market for longer, the pool of active listings grows even if the rate of brand new listings hitting the market stays roughly steady.
• More vendors are willing to test the market. New listings for the month were themselves at a multi-year high, suggesting sellers are less worried about timing a downturn and more focused on getting on with a move.
• Buyers have become more selective. Agents quoted alongside the data describe a shift from buyers rushing in out of fear of missing out, to buyers taking their time because they are more worried about overpaying.

What this means for first home buyers

More stock and slower selling times generally translate into more genuine choice and more room to negotiate, rather than being pushed into a rushed decision at auction. That does not mean every suburb or every price point is behaving the same way. Some of the softening is concentrated at the top of the market, and conditions can still vary a lot between and within cities.

• A longer selling period can mean more time to arrange finance, get a building and pest inspection done properly, and negotiate on price or settlement terms rather than competing purely on speed.
• A widening gap between asking price and sale price is a useful reality check when you're setting a budget. It may be worth researching recent sale prices in an area rather than anchoring on the advertised price alone.
• More choice can make it tempting to keep waiting for something better. Working out what you can actually afford now, rather than guessing at where the market goes next, can help keep that decision grounded.

Run the numbers

Before you factor a softer, more negotiable market into your own plans, it is worth checking what it actually means for your situation:

• Borrowing Power Calculator - see roughly what a lender may be willing to approve based on your income and expenses
• Am I Ready to Buy? - get a sense of whether your deposit, income and other finances line up with a purchase, whatever the market is doing