Property research house SQM recorded a 17 per cent fall in new listings in December (properties on the market for less than 30 days) but with Melbourne's 14,000-plus listings near double that of Sydney's 8346.
Ms Owen said the outlook was "pretty positive" for the smaller capital cities and regional areas, which recorded stronger house price growth in 2020 than Sydney and Melbourne and which were much tighter housing markets in terms of supply and demand.
Regional drift A bigger factor was the migration of people from Melbourne to regional areas, which was higher than any other capital city, according to official figures released in November.
— Louis Christopher, SQM Research managing director Eliza Owen, CoreLogic's head of residential research, attributed the Melbourne surge in listings largely to the city playing catch-up following the easing of stage three and stage four restrictions in the city's second coronavirus lockdown.
"The sharp increase in supply in Melbourne will slow the momentum of house price growth, while in Sydney there is less of a deficit [of housing supply]," Ms Owens said.