Key takeaways
Cotality’s national Home Value Index recorded a third straight month of growth in April.
The rise in values has added approximately $2,720 to the median value of an Australian dwelling over the month.
A lift in home values was recorded across every capital city, ranging from a 0.2% rise in Sydney and Melbourne to a 1.1% gain in Darwin.
Regional housing values have continued to outpace the capitals, with values up 0.6% and 0.2% respectively over the month of April.
As we head into a federal election where housing policies are front and centre, one thing that seems certain is that first home buyers will see some further assistance to access home ownership.
Cotality’s national Home Value Index recorded a third straight month of growth in April, with dwelling values up 0.3% to a new record high.
The rise in values has added approximately $2,720 to the median value of an Australian dwelling over the month.
Home values rose across every capital city, ranging from a 1.1% gain in Darwin to a 0.2% rise in Sydney and Melbourne.
While in positive territory, the pace of growth in national values eased a little from March (+0.4%), with sentiment and auction clearance rates slumping throughout the month.
|
|
Change in dwelling values
|
||||
|
|
Month
|
Quarter
|
Annual
|
Total return
|
Median value
|
|
Sydney
|
0.2%
|
1.0%
|
0.9%
|
4.0%
|
$1,194,709
|
|
Melbourne
|
0.2%
|
1.0%
|
-2.2%
|
1.5%
|
$786,158
|
|
Brisbane
|
0.4%
|
1.0%
|
7.8%
|
11.8%
|
$907,864
|
|
Adelaide
|
0.3%
|
0.9%
|
9.8%
|
13.7%
|
$825,776
|
|
Perth
|
0.4%
|
0.7%
|
10.0%
|
14.7%
|
$807,728
|
|
Hobart
|
0.9%
|
0.9%
|
0.5%
|
4.8%
|
$664,462
|
|
Darwin
|
1.1%
|
3.4%
|
2.5%
|
9.1%
|
$526,410
|
|
Canberra
|
0.4%
|
0.6%
|
-0.6%
|
3.4%
|
$864,343
|
|
Combined capitals
|
0.2%
|
1.0%
|
2.6%
|
6.2%
|
$905,763
|
|
Combined regional
|
0.6%
|
1.5%
|
5.3%
|
9.8%
|
$673,373
|
|
National
|
0.3%
|
1.1%
|
3.2%
|
7.0%
|
$825,349
|
Source: Corelogic HVI 1st May 2025.
The rate cut in February supported an upwards inflection in housing market conditions, but the positive influence from lower rates seems to be losing some potency.
At the same time, household confidence slipped in April, with the US’s ‘Liberation Day’ tariff announcements and the upcoming federal election causing uncertainty.
It is likely this may be causing some buyers and sellers to delay their decisions.
These uncertainties are more apparent in sales and listings volumes compared to home values – a trend compounded by the ‘super break’ many Australians took between Easter and ANZAC public holidays.
This slowdown in buying and selling was evident in weekly auction and new listing numbers.
Over the week ending 20th April, just 644 auctions were held across the combined capitals, the lowest easter auction week since 2019, when the housing market was nearing a cyclical trough and federal election campaigns were dominated by conversations of housing policy reform.
Similarly, new listing numbers also fell to their lowest levels for this time of year since 2019, with just 19,650 for sales listing seen across the combined capitals over the four weeks to April 27th.
With further rate cuts likely as soon as May 20th, and a level of certainty returning to the market after the federal election on May 3rd, we expect a further modest rise in values for 2025.
Although housing values are recording a broad-based rise, not every market is back to new record highs. In fact, across the capital cities, it is only the mid-sized capitals where home values are at their highest level on record.
Sydney values remain -1.1% below their September 2024 high.
Melbourne values are down -5.4% from the record peak in 2022.
Hobart is down -11.1%, while in Darwin and ACT values remain -2.7% and -6.4% below their all-time highs.
The annual pace of gains slowed to 3.2% nationally in April, the slowest annual rise since the 12 months ending August 2023.
The loss in momentum is reflective of the persistent slowdown in value growth seen between mid-2024 and early 2025, which culminated in falls over the three months ending January 2025. The monthly pace of gains turned positive in February, coinciding with the 25-basis point cut to the cash rate.
Given the softer trajectory of growth through last year, it’s likely the annual pace of gains will continue to soften over the coming months, despite the positive inflection in values since February.
Despite stretched housing affordability, growth in house values is continuing to outpace the unit sector.
The past three months have seen the value of houses rise by 1.1% across the combined capitals, more than double the 0.5% lift recorded across the unit sector.
This trend is mostly being driven by Sydney, where house values were up 1.4% over the rolling quarter compared with a -0.3% fall in unit values over the same period.
Hobart had the largest disparity between house and unit growth in the period, with houses rising 1.4% against a -1.1% fall in units.
Melbourne and Adelaide saw an even performance between the two housing types over the rolling quarter, while Brisbane and Perth recorded solid outperformances across the unit sector.
Regional markets continue to outperform the capitals
Regional housing values have continued to outpace the capitals, with values up 0.6% and 0.2% respectively over the month of April.
This trend of regional home values rising at a faster pace than the capitals was a clear feature of the market through the pandemic but has once again become a theme in the monthly growth trends since October last year.
Stronger regional value growth has been broad-based, with every state except Tasmania recording a faster monthly pace of gains in regional values.
However, regional SA and regional WA stood out with the most significant gains, up 1.5% and 1.3% respectively over the past month.
Outlook
The outlook for housing markets continues to evolve, with a mix of potential positives and negatives at play.
On one hand, we have the prospect of lower interest rates and stimulatory policy proposals from both Labour and the Coalition expected to buoy demand.
Also, a persistent undersupply of housing is likely to keep some upward pressure on housing values.
Lower interest rates will support housing sector activity from a purchasing perspective, but lower rates are also likely to embolden prospective sellers and support new housing supply.
Previous research from Cotality shows it has historically been the upper quartile sectors of the market, especially in Sydney and Melbourne, which have been most reactive to rate cuts.
As we head into a federal election where housing policies are front and centre, one thing that seems certain is that first home buyers will see some further assistance to access home ownership.
Whether it’s an expansion of the 5% deposit guarantee, access to super for a deposit, or tax deductibility on mortgage repayments, it is likely that first home buyers will comprise a larger share of the market as stimulus becomes available.
The housing undersupply isn’t getting any better with commencements moving in the wrong direction.
Building activity data to December showed dwelling commencements were down - 4.4% over the December 2024 quarter, holding -16.5% below the decade average.
Additionally, the barriers for building more homes remain substantial, with construction costs rising a further 0.4% through the March quarter.
On the other hand is stretched housing affordability, a relatively cautious lending sector, normalising population growth and some uncertainty creeping into the measures of consumer sentiment and the outlook for economic growth.
With housing values once again trending higher, housing affordability is not improving.
At the end of last year, the national dwelling value to household income ratio was on par with record levels at 8.0, while home loan serviceability was also at an all-time high.
Assuming a household on the median income purchased the median value dwelling with a 20% deposit, they would be dedicating 50.5% of their gross income to mortgage repayments.
Additionally, it would take a household on the median income an average of 10.6 years to save a 20% deposit, and, for rental households on the median income, they would be dedicating a record high 32.9% of their pre-tax income to pay the median rent.
With housing affordability this stretched, accessing the housing market remains a challenge, especially for first home buyers and lower income households regardless of any proposed stimulus.
Population growth, which is a proxy for housing demand, has fallen back to the decade average of 0.4% per quarter.
Less population growth should help to take some heat away from housing value growth, but there is still a substantial cumulative undersupply that has accrued over the past few years.
Recent estimates from AMP economists put this shortfall between 200,000 and 300,000 homes, which will take some time to address.
Until supply and demand are more evenly balanced, it is hard to see any material reduction in housing values.
Consumer sentiment and the volume of home sales have shown long-term relationship, which is unsurprising given the high commitment nature of buying and selling a home.
When sentiment is trending higher, we would typically expect to see a rise in home sales and vice versa.
In April, consumer sentiment was dented due to the announcement of US tariffs on the rest of the world.
With some back pedaling from the US, including a pause on tariffs excluding China, along with widespread expectations of further rate cuts and ongoing tightness in labour markets, we could see sentiment once again move higher.
A further rise in sentiment would be positive for the housing sector, helping to support high commitment decision making.
- Also read:Lower Rates Drive Home Prices Higher Over April | Latest Housing Market Stats Dr. Andrew Wilson
- Also read:What the Latest Data Reveals About Australia’s Housing Future | Property Insiders
- Also read:Perth housing market update [video] | April 2025
- Also read:Adelaide housing market update [video] | April 2025
- Also read:Rental vacancy rates tighten once more ahead of the holiday season | SQM Research
Overall, housing values are expected to continue rising in the short term, albeit at a softer pace than in early 2024.
The outlook is subject to change as global and domestic events unfold.
However, April reinforced the idea that uncertain environments tend to weigh more heavily on sales and listings than on home values.
This is underpinned by a strong lending environment, tight labour market conditions and a persistently low level of mortgage arrears.
