Australian property values reached new heights in March, reversing a recent downward trend, according to CoreLogic’s latest national Home Value Index.
Values increased 0.4 per cent over the month, the second consecutive month of growth in the national index, following a short three-month decline where values dipped 0.5 per cent.
The monthly rise in values was broad-based, with every capital city except Hobart recording a positive change, along with each of the regions. The monthly change across the capitals ranged from a 1 per cent gain in Darwin to a 0.4 per cent fall in Hobart.
Adelaide (up 0.8 per cent) recorded the second highest rise, followed by Melbourne (up 0.5 per cent), Brisbane (0.4 per cent), Sydney (0.3 per cent), then Canberra and Perth (both up 0.2 per cent).
CoreLogic research director Tim Lawless suggests that 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”, Lawless added.
Sydney and Melbourne, which have the largest weighting in the Home Value Index, look 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 ‘24 and January ‘25, 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.
The change in values across the different price points – or value tiers - has started to even out. 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.