Australian housing market update [CoreLogic’s video] | April 2025

Key takeaways

National home values rose 0.4% in March, marking continued recovery across the market.

Interest rate cuts boosted borrowing power, lifting sentiment and stabilising housing prices.

Regional markets slightly outperformed capitals, but the performance gap is narrowing.

Rental prices hit new highs, though annual growth has slowed to 3.8%.

The Australian property market reached new record highs in March 2025, marking a notable recovery after a brief downturn from November to January.

CoreLogic’s National Home Value Index rose by 0.4%, continuing the positive momentum from February’s 0.3% rise. Improved market sentiment, bolstered by recent interest rate cuts, has significantly influenced this turnaround, positively affecting borrowing capacity and mortgage serviceability.

Australian Property Markets in March 2025

Capital cities showed varied results, with Darwin experiencing the highest monthly growth at 1%, while Hobart was the only capital city with declining values (-0.4%). Sydney and Melbourne demonstrated positive momentum, recovering from previous downturns. Sydney home values rose 0.3% in March, although they remain 1.4% below their peak levels recorded in September last year. Melbourne saw a more robust increase, with values rising 0.5% in March but still 5.6% below their March 2022 peak.

Highlights from other cities:

• Adelaide rose by 0.8%, driven by affordable segments.
• Brisbane maintained steady growth, up 0.4% monthly and 0.9% quarterly.
• Perth stabilized with values unchanged since October last year, following significant previous growth.
• Canberra’s unit market and Darwin’s investment sector showed notable growth.

Regional housing markets outperformed capital cities with a 0.4% monthly increase versus a 0.3% rise in capitals.
Auction clearance rates improved, reflecting better market activity.

Change in house prices, 12 months to March 2025:

Source: CoreLogic

Rolling annual change in property prices:

Source: CoreLogic

The gap between upper and lower quartiles of the market has narrowed recently, particularly evident in Sydney. The city's upper quartile outperformed, with a 0.6% increase versus a 0.3% rise in the lower quartile, reflecting historically stronger responses in expensive markets to rate cuts. Elsewhere, the lower quartile remains relatively strong, but growth rates between segments are increasingly aligning.

Regional markets have consistently outperformed capital cities; however, this gap is narrowing. The combined regional index increased by 0.5%, closely followed by capital cities at 0.4%, indicating a convergence trend as urban growth accelerates.

Rental Market Reaches New Highs

The rental market continues to set record highs, with a 0.6% increase nationally in March. Despite this, rental growth has slowed dramatically year-on-year, from 9.7% in late 2021 down to 3.8%, marking the slowest rate since early 2021. This trend is broadly reflected across all capital cities, although specific areas such as Darwin continue to experience high rental yields and increased investment interest.

Source: CoreLogic

Looking Ahead: Property Market Outlook

Looking ahead, the property market is expected to continue experiencing modest growth rather than dramatic surges. Gradual interest rate reductions anticipated throughout 2025, combined with persistent supply constraints and improving household financial conditions, are likely to sustain incremental price increases. However, affordability and reduced population growth will act as moderating factors.

About Tim Lawless Tim heads up the Core Logic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia. Visit www.corelogic.com.au