Why Illawarra home owners considering selling may be better off doing so before spring

That's because while properties for sale currently remain in short supply in the region, more listings could well become available in time for the spring season and create more competition.

CoreLogic research director Tim Lawless said the flow of fresh listings to the Australian housing market has been tracking below the five-year average since September last year, and low available stock levels are one of the key factors supporting housing values at the moment.

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"Even in the current environment of low advertised stock levels amid higher interest rates, we still expect tens of thousands of properties (nationally) to list in the next couple of months," he said.

Mr Lawless said across the Illawarra region, advertised properties remain in short supply.

He said CoreLogic counted 1983 homes available for sale over the three months ending May; 11.9 per cent below the previous five-year average for this time of the year.

"Only 1029 fresh listings were added to the market over the past three months, which is roughly 20 per cent below the previous five-year average," he said.

"With our Propensity to List model continuing to indicate supply shortages ahead, market conditions are likely to remain in favour of sellers. Buyers have little in the way of choice, while sellers don't have much competition.

"It will be important to watch the new listings trend leading into spring. This is when we could see listings become more active, especially if selling conditions remain strong and prices continue to their upwards trajectory."

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CoreLogic's data showed that in the Kiama LGA, 1.5 per cent of homes likely to list over the coming three months.

In the Shellharbour LGA, 1.7 per cent of homes are likely to list over the coming three months; and in Wollongong, 1.1 per cent of homes are likely to list over this period.

The Mercury asked Mr Lawless if more homes do come on the market in the Illawarra this spring, what that could mean for house prices in the region.

"If advertised supply levels rise without a commensurate lift in the number of active buyers we would probably see some heat coming out of the market," he said.

"The main reason we are seeing renewed upwards pressure on housing values is simply because available supply isn't keeping up with the level of demand in the market.

"If the balance between supply and demand starts to normalise, buyers should have more choice, less urgency and more leverage at the negotiation table."

Mr Lawless said with advertised supply in the Illawarra remaining below average, selling conditions are once again skewed towards the seller.

"Discounting rates for private treaty sales have reduced back to 4.5 per cent over the three months ending May, down from a recent high of 5.6 per cent in October last year, and median selling times have also reduced," he said.

"Home owners thinking about selling could be better off doing so through winter while stock levels remain low and selling conditions are strong, rather than waiting until spring when there might be more competition to sell."

CoreLogic head of banking and finance solutions Eugene Vassiliev said Propensity to List identifies customers who are highly likely to list their home for sale within the next three months.

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