CoreLogic’s latest Housing Value Index report for March 2025 highlights a subtle, yet positive, shift in Australia’s property market, offering a cautiously optimistic outlook for landlords. The report indicates that after a brief three‐month downturn, national housing values have begun tore-accelerate, with a modest monthly rise of 0.3% in February. This rebound is driven by improved sentiment in the market, which is particularly evident in capital cities such as Melbourne and Hobart where monthly increases reached 0.4%. These improvements are welcome news for landlords seeking long-term capital gains from their investments.
From a landlord’s perspective, the return of value growth in previously weaker markets is encouraging. Melbourne, having experienced ten consecutive months of declining values, now shows signs of recovery. Hobart, too, is emerging from a downturn, making these locations increasingly attractive for property owners looking to bolster their portfolios. Conversely, mid-sized capitals like Brisbane, Perth, and Adelaide are demonstrating lower monthly changes, with figures ranging from 0.2% to 0.3%. While these cities continue to record positive trends, they underscore the need for landlords to consider the varied dynamics across different regions when assessing their investment strategy.
Rental trends also feature prominently in the report. Nationally, rental values experienced a monthly increase of 0.6% in February–the strongest rise since May of the previous year. However, it is important to note that the annual growth in rents stands at 4.1%, which, although above pre-pandemic averages, represents a marked slowdown compared to previous peaks. This deceleration in rental increases is attributed to seasonal factors, evolving household demographics, and the normalisation of net overseas migration. For landlords, this suggests that while the current rental environment remains robust, it is also subject to natural market cycles and demographic shifts.
Gross rental yields have seen a modest uplift, with national yields inching upwards to 3.72%. This is largely due to rents rising at a slightly faster pace than housing values. Yet, there is notable regional variation: while areas like Adelaide and Perth continue to offer attractive yields, major cities such as Sydney and Melbourne remain more modest in this regard. Landlords should therefore examine local market conditions carefully to align their expectations with realistic yield outcomes.
The report further suggests that improved market sentiment, bolstered by expectations of further interest rate cuts, is beginning to drive buyer activity and improve auction clearance rates. For landlords, such developments may translate into enhanced property values and increased transaction volumes, reinforcing the importance of timing in property investment decisions. At the same time, inventory levels in key markets have remained relatively elevated, particularly in Sydney, Melbourne, Hobart, and the ACT. This indicates that while property values are on a gradual upward trend, a balanced market exists, preventing overheating that could ultimately affect tenant affordability.
Overall, the CoreLogic report provides a nuanced picture. Landlords can take heart from the upward trend in property values and modest improvements in rental yields, yet it remains essential to balance these positives with sensitivity to tenant affordability concerns. As market conditions continue to evolve, a measured, region-specific approach will be key in ensuring that investments remain sustainable and that the broader community’s needs are duly considered.
Gross rental yields nationally
