Buyer optimism and an interest rate cut have seemingly reversed the small dip in average Australian property prices that we witnessed at the end of last year.
Once again, property values are on the rise and both the Sydney and Melbourne markets appear to have turned the corner.
Industry researcher CoreLogic reports that values rose 0.4% in March, compared with the February average. The fastest growing values were recorded in Darwin (1%), while Hobart slipped (-0.5%).
The national swing back to positive trends follows a -0.5% reversal over a three-month summer period. Now, the market has recorded two consecutive growth months.
Tim Lawless, research director for CoreLogic, said, “Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values.
“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.”
The CoreLogic Home Value Index found Sydney’s prices are just 1.4% off their all-time high due to a drop of -2.2% between last September and January.
In Sydney, transactions are now being equally apportioned across the lower and higher quartile markets.
In the last few months, its market has been dominated by deals at the lower end of the market, suggesting restricted affordability. However, that trend is now easing.
The downturn in Melbourne, which hit a price peak the three years ago, remains -5.6% below its record average. However, values have jumped 0.9% in the past two months.
The cities that boomed in 2024 – Perth, Brisbane and Adelaide – have now cooled. It’s amazing to think that average Perth prices have risen more than 75% in the past five years.
Regional markets are up 0.5%, suggesting we’re likely to see stable value growth in urban and regional areas.
The strongest regions are in Queensland and Western Australia. Centres such as Townsville, Qld, (+23.5%) and Geraldton, WA, (+25.4%) have benefited from the popularity of their respective states.