Housing stock on market is falling, but still has some way to go before reaching the levels it saw last year.

New figures from SQM Research show residential listings for June fell 2% compared to May. Every capital city apart from Darwin saw a month-on-month decline, with Hobart experiencing the largest decline at 6%. The result represents the second consecutive month of stock declines.

While listings have fallen, they remain elevated compared to the same time last year. Housing stock nationally was up 23% compared to June 2010. Melbourne has recorded the highest year-on-year increase, with stock levels 47% above their mark last year. However, SQM managing director Louis Christopher said the housing market is edging closer to bottoming out, and that the level of listing may have peaked.

"It's too early yet to call a bottom in the current housing downturn and even when it eventually does come, a recovery is very likely to be slow. But clearly we are much closer to a bottom in the market than where we were 12 months ago," he said.

Christopher commented that the direction of the housing market in the months ahead will be largely dependent on the interest rate environment and any government intervention in the marketplace.

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