Australia’s housing market continues to shift, with CoreLogic’s latest Home Value Index revealing a complex landscape for both homeowners and first-time buyers. While national home values remained steady in January, regional Australia reached record highs, and capital city markets presented mixed results.
Prices Holding, But Trends Vary
Nationally, dwelling values saw a negligible decline of just -0.03%, with the capital cities dragging the overall result lower due to a -0.2% decline. However, regional areas saw a 0.4% rise, reflecting ongoing demand for affordability and lifestyle opportunities outside the major cities.
Among the capitals, Melbourne (-0.6%), Canberra (-0.5%), and Sydney (-0.4%) recorded declines in January, while Hobart held steady. Brisbane and Perth saw values continue to rise, but at a slower pace, particularly in the detached housing sector. Over the past year, Perth has been the standout performer, with an impressive 17.1% growth, followed by Adelaide at 12.7% and Brisbane at 10.4%. In contrast, Melbourne values are down -3.3% annually.
Interest Rate Outlook and Affordability Pressures
A potential shift in interest rates is on the horizon, with markets predicting a rate cut as early as February. Lower rates would increase borrowing capacity and provide some relief to mortgage holders, but affordability remains a challenge. While some cities have seen price corrections since peak levels—such as Hobart (-12.5%) and Melbourne (-6.9%)—housing values in many markets remain well above pre-pandemic levels.
Affordability concerns continue to weigh on buyers, particularly in cities where prices have surged over the past five years. Perth’s median home value has risen by 78.2% in that time, while Brisbane (70%) and Adelaide (73.7%) have seen similarly strong growth. Even in Sydney, where price growth has been more modest at 1.7% over the past 12 months, the median home value still sits at $1.19 million, keeping home ownership out of reach for many.
Regional Strength and Market Supply
Regional markets have benefited from internal migration, more affordable housing, and an ongoing preference for flexible working arrangements. However, the pace of growth in these areas is slowing. While regional Victoria saw a -2.6% decline in values over the past year, most other regional markets continued to post gains.
Supply constraints are another key factor shaping the market. Despite a recent uplift in dwelling approvals, new housing construction remains below demand levels. High material and labour costs are limiting development, which could place ongoing pressure on prices in undersupplied areas.
What It Means for Buyers and Owners
For homeowners, stable or rising prices in some markets may offer confidence, though the overall rate of growth is slowing. For prospective buyers, increasing stock levels in some capital cities, combined with the possibility of lower interest rates, may create better opportunities. However, affordability remains a significant challenge, and price relief is unlikely to be uniform across all markets.
Monthly change in capital city home values
