Vendors feel pinch

PROPERTY vendors are offering bigger discounts to attract buyers as the housing market deteriorates, while expectations for future house prices are falling sharply, according to investment bank Morgan Stanley.

Buyers can now find better discounts in Sydney than in Brisbane for the first time in a decade, averaging 4.4 per cent compared with 4.2 per cent in the Queensland capital, the bank says.

Melbourne discounts have increased to 3.6 per cent, while in the resources-affected Perth, market discounts are wider at 6.1 per cent.

The research comes as regulatory clamps on lending have weighed on house prices, with further weakness still expected.

Meanwhile, a rise in available stock has also been putting pressure on dwelling prices, as national residential listings rose 1.9 per cent in the month to June, according to SQM Research.