Australian property values reached new heights in March, reversing a recent downward trend, according to CoreLogic’s national Home Value Index.
Values increased 0.4% over the month, the second consecutive month of growth in the national index, following a short three-month decline where values dipped 0.5%.
The monthly rise in values was broad-based, with every capital city except Hobart recording a positive change, along with each of the rest-of-state regions. The monthly change across the capitals ranged from a 1.0% gain in Darwin to a -0.4% fall in Hobart.
“Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values, along with the cut’s direct influence of a slight improvement in borrowing capacity and mortgage serviceability,” said Tim Lawless, research director for CoreLogic, which will soon rebrand to Cotality.
“With the rate-cutting cycle expected to be drawn out, it will be interesting to see if this positive inflection in values can last in the face of affordability constraints.”
Sydney and Melbourne, which have the largest weighting in the Home Value Index, look to have turned a positive corner, with values across both cities rising over the past two months.
Following a -2.2% decline between September ‘24 and January ‘25, Sydney home values remain just -1.4% below their record high. In Melbourne, where the downturn has been long-running following the March 2022 peak, values remain -5.6% below their record high, despite rising 0.9% over the past two months.
Although values are still increasing across the mid-sized capitals, the pace of gains has slowed noticeably, especially in Perth, where downward revisions over recent months have put values slightly below peak levels (-0.05%) from October last year. Perth home values have led the five-year upswing among the capitals, rising 75.4% since March 2020.
The change in values across the different ‘price points’ – or value tiers - has started to even out. Following a clear out-performance from the lower quartile of the market since mid-2023, the rate of change across the value segments is starting to converge. This was most apparent in Sydney where upper quartile values have increased by 0.6% over the past three months compared with a 0.3% rise across the lower quartile.
Earlier research demonstrated that relatively expensive markets have historically shown stronger responses to reduced cash rate settings, especially houses in Sydney and Melbourne. Most of the remaining capitals continue to see the lower quartile record a higher rate of change relative to the upper quartile, however, the gap is getting smaller.
Regional markets continue to outperform the capitals, with the combined regionals index rising 0.5% compared with a 0.4% gain seen across the combined capitals. However, the growth trajectory looks to be converging as the capital city trend accelerates and the regional trend holds steady.
Across the regional SA3 level sub-markets, the strongest growth conditions continue to be skewed towards areas of regional WA and Queensland. The Mid-West of WA, which includes Geraldton, tops the list for annual growth with a gain of 25.4%, followed by Queensland’s Townsville (23.5%), Gladstone (22.2%), Central Highlands (21.8%) and Mackay (20.2%).
CoreLogic Australia