Australia's residential property market pulled back slightly in August after a strong July, with SQM Research figures showing national listings fell 3.3% to 269,717 dwellings.
Despite the monthly dip, stock levels remain 12.8% higher than the same time last year, continuing to hand buyers considerably more choice than they had in 2025.
The retreat wasn't uniform across the capitals. Melbourne and Hobart recorded the steepest monthly falls, down 4.7% and 4% respectively, while Brisbane bucked the trend with a modest 0.5% rise. On an annual basis, Brisbane's growth stands out furthest, with listings now 26.5% above August 2025 — the strongest increase of any major capital. Hobart remains the outlier in the other direction, the only capital carrying materially less stock than a year ago.
New listings rose 1.7% nationally to 74,049 dwellings and sit 3.1% higher year-on-year, suggesting vendor activity held up reasonably well through the month despite mixed results across individual cities.
Older listings — those on the market for more than 180 days — eased 1% nationally to 77,355 properties, though Sydney, Melbourne, and Brisbane all recorded increases in this category, pointing to pockets of stock ageing in the east coast capitals.
Distressed listings climbed 4.2% nationally in August to 4,510 properties and are now 10% higher than a year ago. Queensland, Western Australia, South Australia, and the ACT all posted sizeable annual increases, with the ACT up 59.5% and South Australia up 50.7%.
A separate HTW review released the same week found investor lending fell 8.6% in the June quarter — the sharpest drop since September 2022 — as tax changes and a new SMSF borrowing ban weighed on demand, while national dwelling values dropped 0.7% for the month, their steepest decline since December 2022.
SQM Research managing director Louis Christopher (pictured) said the shift was worth watching closely.
"National distressed stock is now 10% higher than a year ago, with particularly large annual increases in Queensland, Western Australia, South Australia and the ACT," Christopher said. "These numbers are still relatively contained, but the direction of travel has clearly changed compared with earlier in the year."
Asking prices, meanwhile, stayed largely flat over the month, easing 0.1% nationally while remaining 5% higher annually. Separate PropTrack data shows national prices falling for a fifth straight month, with capital values down 3.6% from their March peak while regional markets, up 6.6% annually, have held firm.
Christopher noted the combination of rising stock and distress levels sets up a key test ahead.
"With more stock available and distressed listings trending higher, the spring market will provide an important test of vendor expectations and buyer demand," he said.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
