More homes were listed for sale last year than the year prior, and understanding what’s driving that activity can help us think about what trends might be important for the year ahead.
New property listings were 7.9% higher in 2024 compared to 2023. It was the highest year for new listings since 2021 and prior to 2021, the highest since 2017.
To understand the state of the property market – and what’s to come in 2025 – it’s important to understand these trends and if they’re likely to continue. This article looks at who has been listing properties for sale in the past year.
The results suggest strong listings activity has been mainly due to positive market conditions – similar to levels seen in 2018, along with higher-than-normal listings by pandemic buyers. The cause of this selling activity, in general, appears to be related to unexpectedly large increases in home equity from price growth.
To understand this, I built an Age-Period-Cohort (APC) model to understand historical trends in home listings.
It separates listings activity into:
The last of these – age effects – gives an estimate of how likely a homeowner is likely to list their home as time passes.
It turns out about 40% of homes are relisted within 10 years of purchase (120 months), on average.
Period effects in the model give an idea of how financial and market conditions affect the average listings behaviour of all owners throughout time, as well as the seasonality of property listings throughout the year.
These effects answer part of the question of why listings activity was strong throughout 2024 – general economic and market conditions improved. On this measure, conditions are as good for listing homes as last seen in 2018 (excluding the mid-pandemic burst of activity).
These are factors mean all owners – regardless of when they bought their home – have been more likely to list their home for sale.
Many things may be driving this measure of conditions but based on discussions with market professionals, a few things seem to have been important for selling activity.
First, there has been appreciable market stability after a period of uncertainty. Second, price growth since the pandemic has put many owners in a strong financial position to upgrade. Third, demand in the market remains strong giving sellers confidence of a positive selling environment.
On top of positive market conditions supporting home listings, buyers from early in the pandemic – those who bought in 2021 and 2022 – continue to list their homes at higher rates than other buyers.
What this means in practice is noticeably more buyers from that period have listed their homes for sale after only a few years of ownership.
For example, as a share of all buyers, about 3 per cent more buyers who purchased their home in 2021 and 2022 had listed their home for sale after three years.
This has had a significant impact on the market – about 40,000 more properties have been listed for sale than we would have expected if these groups followed the average listing profile of previous buying groups.
It is tempting to attribute higher listings of pandemic home purchases to higher interest rates since 2022, and financial stress for recent buyers.
But looking across the country shows a strong correlation between recent price growth and quick resales of homes, more so than changes in labour market conditions, which are likely to be associated with financial stress.
This relationship suggests listings by recent buyers is related to good, not bad, news. The mechanism appears to be that strong home price growth since the pandemic is providing equity to recent buyers, allowing them to upgrade sooner than would typically be the case.
Of course, there would also be some buyers that have found the higher interest rate environment difficult to navigate given how rapidly mortgage costs have increased relative to market expectations in 2021, and some may have been forced to list their homes.
The advantage of this model is that it breaks down the different drivers of seller activity, and allows us to think about their persistence in the future.
First, the impact of higher-than-usual listings by those who bought their homes in 2021 and 2022 appears to be waning. This could be due to slowing home price growth across the country, or a natural slowdown (given there are now fewer of these buyers who are yet to relist their homes).
Second, it appears positive market and economic conditions are persisting into the start of 2025 and are expected to continue to support housing sentiment (at least in the short term). Economic stability and positive employment conditions — which are important for long-term financial decision-making, such as upgrading homes — is expected to continue over the near future.
Interest rate cuts, increasingly expected to arrive soon, may continue to boost conditions for home buyers and confidence among sellers.
Buyer demand remains strong and high levels of sales activity are likely to continue to support vendor confidence. That said, home price growth is expected to slow over the coming years, and could dampen seller confidence.
