A declining number of new property listings is a strong indicator of higher prices to come, according to AMP Capital’s chief economist Shane Oliver.

Demand for homes is still strong because of low interest rates and Government stimulus, but not enough to supply to match, market forces will push prices up.

Dr Oliver said, “Lower listings are consistent with a normal cyclical upswing, as was seen in mid-2019 when prices start to rise and auction clearance rates rose off low volumes. It augurs well for price gains in the months ahead.”

Data from CoreLogic shows that the number of new homes available for purchase across all capital cities, as of January 10th, is down 18% year-on-year. Listings were down in every capital except Melbourne, where vendors are still playing catch-up after a lengthy lockdown.

Eliza Owen of CoreLogic said, “Listings soared when Melbourne came out of restrictions … the market went from 2000 new listings a month to over 8000. It’s why Melbourne listings are so high.”

Overall, until such time as the construction industry is able to overcome a lack of supply, house prices will likely continue to rise with the increasing demand.