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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 per cent over the month, marking the second consecutive month of growth in the national index, following the brief three-month decline where values dipped 0.5 per cent.
According to the index, every capital city except Hobart recorded a positive change, along with each of the rest-of-state regions. The monthly change across the capitals ranged from a 1.0 per cent gain in Darwin to a 0.4 per cent fall in Hobart.
Tim Lawless, research director for CoreLogic (soon to rebrand as Cotality), said: “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.
“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, appear to have turned a positive corner, with values across both cities rising over the past two months.
Following a 2.2 per cent decline between September 2024 and January 2025, Sydney home values remain just 1.4 per cent below their record high.
In Melbourne, where the downturn has been long-running following the March 2022 peak, values remain 5.6 per cent below their record high, despite rising 0.9 per cent 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 per cent) from October last year.
Perth home values have led the five-year upswing among the capitals, rising 75.4 per cent since March 2020.
According to CoreLogic, 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 per cent compared with a 0.4 per cent 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.
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