The national median dwelling value went up 3.4% to a new peak of AUD820,300 (US517,100) as of March 31, according to data provider CoreLogic.
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A house under construction stands in front of newly built homes at a housing development located in the south-west Sydney suburb of Menangle Park on Feb. 20, 2025. Photo by AFP |
Perth experienced the largest growth rate at 11.9%, followed by Adelaide, 11%.
Sydney was the most expensive property market with a median value of AUD1.19 million per unit, up 0.9% year-on-year.
CoreLogic research director Tim Lawless attributed the increase to a “confidence boost” in the market, driven by the Reserve Bank’s interest rate cut in mid-February, its first reduction in four years.
He added that it was “probably more about the sentiment lift rather than any real uplift in serviceability or borrowing capacity,” according to ABC News.
But the property market will likely face upcoming challenges like slowing population growth and persistent housing unaffordability for many Australians, which could drive prices down.
“We still have very unaffordable housing prices. Even though sentiment is rising it’s doing so from a low base, and we’re also seeing some uncertainty around global trade wars and conflict as well.”
Another market research firm, PropTrack, found a similar trend with its data showing national home prices 3.9% year-on-year in March, and 48% higher than five years ago.
“February’s rate cut boosted borrowing capacities and buyer confidence, helping to reignite demand and reverse the small price declines seen in the months prior,” REA Group senior economist Eleanor Creagh said.
“Buyers who had delayed purchasing decisions due to the sustained higher interest rate environment are likely re-entering the market, she added.
The higher housing prices have also pushed up rents, with the national rental index rising by 0.6% in March, according to CoreLogic.
However, the gain was considered marginal compared to the 1% growth in the same time last year.
“We’re not seeing anywhere near the same level of rental growth as what we were seeing, say, a year or two ago,” Lawless said.
He added that in previous years rents jumped up 14-15% per year in most markets.
“As overseas migration normalizes and the average household becomes larger, we should see a further slowdown in rental growth,” Lawless said, as cited by Bloomberg.
Nerida Conisbee, chief economist at Ray White, noted that the country’s housing market has demonstrated “resilience” following a short decline and is now steadily climbing, though at a more tempered rate.
“The resilience of Australia’s housing market reflects the fundamental undersupply that continues to characterise our market,” she said, as reported by The Courier Mail.
“While global economic challenges create uncertainty, the structural factors supporting Australian property prices remain firmly in place.”
Financial analysts expect further rate cuts until the end of the year.
