Housing demand is now back at the healthy 2006 levels but increased resale supply is negatively affecting the new low-rise market and the outlook for house prices, according to Will Dunning:

"The volume of listings has increased sharply this year (currently about 15% above year ago levels), signaling a probable shift to an end-of-cycle psychology. In addition to reducing price pressure, increased resale supply is negatively affecting the new homes market."

In the latest edition of his Housing Market Digest, Dunning reports that resale market activity has rebounded from the slump this winter. While sales are below the 2007 record, recent activity is comparable to figures seen during 2004 to 2006. In June this year, 8,600 actual sales equated to 83,800 seasonally adjusted, slightly below May’s 86,900, his report says.