Housing values continue buoyant run through May | Australian Markets

Australian dwelling values continued their upward swing in May off the back of successive RBA price cuts, with broad-based beneficial properties recorded throughout each capital metropolis within the nation, property information analyst Cotality (previously CoreLogic) has revealed in its latest Home Value Index (HVI).

Dwelling values grew a additional 0.5% this month, taking the national index 1.7% increased over the primary 5 months of the 12 months (with 1.3% recorded for the final quarter).

The beneficial properties have been broad-based, with each capital metropolis posting a rise of at the very least 0.4% through the month.

The rise in values follows what Cotality describes as a “short and shallow” decline of 0.4% over the three months to finish of January 2025.

The February price cut – in addition to the promise of additional cuts through this 12 months – has largely pushed this constructive flip, Cotality argues.

However, on annual phrases, the HVI stays sluggish, recording its slowest 12-month change – at +3.3% – for the reason that 12 months ending August 2023. The mixed capitals price of growth was even slower, recording simply 2.6% growth over the 12 months.

“This slower annual pace of growth reflects the easing in capital gains through the second half of last year, culminating in the modest fall in values over the three months to January 2025,” mentioned Cotality analysis director Tim Lawless.

From its price peak in September 2024, Sydney has retreated by 0.3%. Melbourne costs, which peaked in March 2022, have declined by 4.5%.

However, solely Melbourne and Canberra recorded annual declines in dwelling values, down 1.2% and 0.7%, respectively, “demonstrating”, Cotality says, “the resilience of the market through a period of relatively high interest rates and cost of living pressures”.

Capital convergence

Capital metropolis dwelling values have proven a “clear convergence”, Cotality discovered, with the vary between highest and lowest annual change in values – 9.8 proportion factors – at its narrowest level in more than 4 years. The vary in annual growth peaked in August 2024, with a 26.1 proportion level distinction between the best (Perth) and lowest (Hobart) annual growth charges.

“The convergence is driven by a slowdown in value growth across mid-sized capitals, while previously softer markets like Melbourne and ACT move back into growth, driving a diminishing rate of annual decline.”

Overall, Cotality concludes, home values are anticipated to see modest beneficial properties through 2025 – albeit at a slower tempo than recorded in 2024. While one other spherical of price cuts will keep housing demand bubbly, ongoing affordability pressures, in addition to restrictive lending insurance policies, are prone to keep a cap on housing values.