Australia’s housing market showed signs of a turning point in May, with a sharp rise in property listings, stalling asking prices, and an increase in distressed properties, according to new data from property research firm SQM Research.
Total national residential listings rose 10.4% month-on-month in May to 258,803 dwellings. National listings are now 0.8% higher year-on-year, marking the first annual increase in available housing stock in more than a year.
The increase in listings was broad-based across most capital cities. Darwin recorded the largest monthly rise nationally at 19.5%, followed by Brisbane, up 18.5% to 16,973 properties, and Sydney, up 14.8% to 39,167 dwellings. Melbourne rose 10.7% to 46,928 dwellings – the highest total among all capitals – while Adelaide climbed 14.1% and Canberra 12.1%.
Perth continued its recent rebound, with listings up 16.0% to 15,230 dwellings. Although the city remains 9.8% below May 2025 levels, it has now recorded three consecutive months of substantial listing growth. Hobart was the only capital to record a subdued result, with listings rising just 1.0% over the month.
New listings rose 5.0% nationally to 77,270 dwellings and are now 12.0% higher year-on-year. Older stock also increased 10.5% to 73,820 dwellings nationally, although it remains 10.8% below year-ago levels.
Despite a marginal 0.1% rise in combined national asking prices, leaving them 10.4% higher year-on-year, SQM Research’s Weekly Asking Prices Index for the week ending 26 May 2026 showed five of the eight capital cities recording monthly declines.
Sydney fell 0.3% on a combined basis, although it remains 5.6% above year-ago levels. Melbourne eased 1.1% month-on-month while maintaining annual growth of 4.4%. Brisbane and Perth declined 1.0% and 0.8%, respectively, while Adelaide dropped 1.7%, although all three continue to post solid annual gains.
Canberra, Darwin, and Hobart were the only capitals to record monthly increases, rising 1.4%, 0.3%, and 2.1%, respectively.
Distressed listings rose 5.1% nationally during May to 3,847 properties. Western Australia led monthly increases at 9.1%, followed by South Australia at 9.0% and Queensland at 8.9%. The Australian Capital Territory rose 6.8% and now sits 38.2% above year-ago levels, making it the only jurisdiction to record a positive annual change.
Despite the monthly increase, national distressed listings remain 16.2% below May 2025 levels.
SQM Research managing director Louis Christopher said May’s data pointed to a market losing momentum.
“When supply returns this quickly while prices stall, it is usually an early sign that the market is at turning point, keeping in mind April recorded a seasonally low level of listings,” Christopher said.
He said the national price reading masked broader weakness across the major capitals.
“With five of the eight capitals now declining month-on-month, the moderation we flagged earlier this year is broadening,” he said.
Christopher said distressed listings were being watched as an early indicator of mortgage stress, adding that the balance of risk had shifted to the downside.
“The next few months will confirm whether May was the inflection point,” he said.
