The number of homes newly listed for sale is up by seven per cent from a year ago, but that extra supply coming onto the market was not enough to stop prices rising 10.9 per cent in the mainland state capitals.
The rise was led by Sydney, where prices are up 18.1 per cent from a year ago, and Melbourne, with an annual rise of 10.8 per cent.
Demand grew more than enough to match increased supply over the past year, enough to keep the total number of homes on the market roughly steady.
There were 96,859 homes listed for sale last week, according to the latest CoreLogic RP Data report.
That was up only 0.3 per cent from the 79,580 on the market this time last year despite the greater volume of newly listed properties.
A year ago, annual price growth was very much the same as it was over the year to last week, according CoreLogic RP Data.
But the forces acting on the market were different, with new property listings – properties on the market for less than four weeks – not growing at all through that year, but instead falling by 1.5 per cent.
But the total number of properties listed this time last year was down 13.2 per cent from a year earlier.
That pattern suggests demand for housing has risen much more rapidly over the past year than the year before, with a similar price rise this year despite a much stronger flow of homes being put up for sale.
Where the market goes from here is a key question, not just for home buyers but for the economy, because the housing market, and the housing construction industry, has a disproportionate effect on economic activity.
At some point it will top out or, at the very least, slow to a sustainable rate of price growth.
No doubt, as auction clearance rates gradually direct lower between now and the end of the year there will be excited claims that the end is not just nigh, but that it has actually, finally, arrived.
But declining auctions clearances, especially if prices continued to push higher, would simply be consistent with the usual seasonal pattern.
The key test for the market will be whether supply contracts in line with demand as price rises slow and possibly stop as buyers become more cautious.
Home-owners thinking of cashing in on the price boom in Sydney and Melbourne, as many obviously are at the moment, could decide to hold their properties off the market in the hope that prices later head higher, partly offsetting the lack of new buyers.
Or they could rush to sell before prices fall even more.