Cashed-up buyers will be in a commanding position as fresh spring listings overwhelm an already overburdened property market.
According to SQM Research, the number of national residential property listings increased by 4 per cent during July 2011 to 377,315.
The national stock level sits 21.9 per cent higher year on year, increasing by 67,785 since July 2010.
SQM Research managing director Louis Christopher said: “This latest rise in stock levels does not bode well for spring, when seasonally tens of thousands of new listings come on to the market.”
He warned: “Unless there is a flash interest rate cut by October, house prices will almost certainly head south from here.
“It won’t be a collapse of the market as there are still few forced sellers; however it won’t exactly be pleasant for the sellers.
“Buyers are largely going to be in the commanding position when it comes to negotiations this spring.”
Mr Christopher said the increase in July listings potentially revealed that sale stock had not yet peaked for the cycle and the May and June monthly declines occurred solely due to seasonality.
Melbourne was the capital city to record the largest increase year-on-year, with stock rising 45 per cent since July 2010.
Darwin was the only capital city to record a monthly decrease in July in stock, falling by 1 per cent.
Hobart experienced no change in stock, while the remainder of capital cities recorded monthly increases.
Both Brisbane and Darwin recorded the largest monthly increase in stock levels, both rising by 6 to 31,859 and 45,725 respectively.