Quarterly Property update

Home values rebound at the end of the quarter after cash rate cut

Housing markets look to have moved past the recent short and shallow downturn. While the quarterly figures remained flat, housing values for the month of February saw a rebound as the RBA decreased the cash rate for the first time since November 2020.

CoreLogic’s national Home Value Index posted a broad-based rise of 0.3 per cent in February that saw every capital increase, with the exception of Darwin, which posted a weak decrease of -0.1 per cent.

A rebound where values were the weakest

The largest month-on-month change across the capitals was recorded in Melbourne and Hobart (both up +0.4 per cent) where home values have previously been among the weakest. For Melbourne, the lift breaks a streak of ten consecutive months of falling home values.

Sydney recorded the second strongest increase of 0.3 per cent. These results are consistent with previous research from CoreLogic which noted it has been the premium markets of Sydney and Melbourne that have responded the earliest and most positively to rate-cutting cycles.

Conversely, the mid-sized capitals of Brisbane, Perth and Adelaide are no longer the strongest growth markets.

The expensive end of the market bouncing back

The return to growth across Sydney and Melbourne is being supported by the more expensive end of the market, rebounding quickly after high-value markets recorded the sharpest declines. This stronger performance and rebound in more expensive property is also in line with earlier research from CoreLogic, which highlighted that premium housing markets in Sydney and Melbourne have historically been the most sensitive to rate cuts.

The regions recording growth

Regional housing conditions continued to show a stronger growth trend relative to the capital city counterparts, with values across the combined regionals index rising 0.4 per cent over February and 1.0 per cent over the quarter – compared to the capital city values which recorded a 0.3 per cent monthly rise and a -0.4 per cent quarterly fall.

According to CoreLogic’s research director, Tim Lawless “Regional markets seem to be benefitting from a second wind of internal migration, along with an affordability advantage in some markets, and what looks to be some permanency in hybrid working arrangements across some occupations and industries. Late last year, ABS reporting on working arrangements revealed 36.3 per cent of employed people usually worked from home, which was down from COVID-highs, but still above the 32.1 per cent reported in 2019.”

Borrower sentiment leading the uptick

In the March CoreLogic report Tim Lawless said the improved housing conditions have more to do with improved sentiment than any immediate improvement in borrowing capacity.

“Expectations of lower interest rates, which solidified in February, look to be flowing through to improved buyer sentiment.

Along with the modest rise in values, we have also seen an improvement in auction clearance rates, which have risen back to around long-run average levels across the major auction markets.

Consumer sentiment also tends to have an impact on the volume of home sales and while we have seen an increase in consumer sentiment measures over the past 6 months, the past couple of months have been flatter. If consumer sentiment returns to more optimistic levels, we would likely see a corresponding increase in housing values.”

Declining supply of listings and new homes being built

Improved market conditions may also be reflecting a slowdown in the amount of ‘for sale’ listings. New listings across the combined capitals were -4.7 per cent lower than a year ago. Mr Lawless commented “Although total advertised supply levels are almost 1 per cent higher than a year ago, listings remain -7.9 per cent below the previous five-year average and the reduced flow of fresh stock to market could be supporting some upward pressure on prices, especially if buyers are becoming more active amid higher sentiment and lower rates.”

Low levels of new housing construction are also anticipated to support housing values, with multi-unit dwelling construction in particular, well below the average.

Expectations of a drawn-out cash rate

The most recent CoreLogic report noted that the rate-cutting cycle is very fresh and is likely to be drawn out. Lower mortgage rates are positive for housing markets, supporting a rise in borrowing capacity and serviceability assessments, but despite the recent rise, the cash rate is anticipated to remain relatively low for the near future which is anticipated to limit growth.

Dwelling values over the quarter

Melbourne

The Victorian capital posted a -1.1 per cent quarterly move according to CoreLogic figures, taking the city’s median dwelling price to $772,561. Investors should take note that the gross rental yield figure for Melbourne now sits at 3.7 per cent.

Sydney

In the three months to February’s end, Sydney experienced a dwelling value change of -0.9 per cent resulting in a median of $1.186 million. The gross rental yield for the Harbour City is currently the lowest of the capitals at 3.1 per cent.

Brisbane

The Queensland capital has again recorded the second most expensive spot for dwelling values at $894,425, and a quarterly rise of 0.9 per cent. Brisbane has recorded a gross rental yield of 3.7 per cent.

Canberra

The national capital recorded a decline of -0.8 per cent during the quarter with the median now sitting at $846,955. For Canberra, the gross rental yield is 4.1 per cent.

Perth

Continuing its lead as the best-performing capital over the quarter, Perth jumped 3 per cent for the second quarter in a row, taking its medium to $807,933. Perth recorded 4.3 per cent gross rental yield.

For more information about how you might be able to purchase a property in the current market, get in touch with us today.

Home value median prices

Note: all figures in the city snapshots are sourced from: CoreLogic’s national Home Value Index (March 2025)

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