Australia’s Property Market Sees New Record Highs – But Can It Last?
by Leigh Martinuzzi MPG – eXp Australia
This week I’ve been diving into the latest CoreLogic Home Value Index report, and it’s clear that we’ve entered a new chapter in Australia’s property market. National home values hit a fresh record high in March, with prices rising 0.4% for the month—marking two consecutive months of growth and a reversal of the slight downward trend we saw earlier this year. While some may be surprised by this positive momentum, for those watching closely, it’s likely a reflection of improving market sentiment following February’s rate cut. And while many were predicting a further rate cut when the RBA meet again on the 1st of April, the RBA decided to keep the rates on hold at 4.1%.
Every capital city, except for Hobart, saw prices increase in March, and regional markets also continued their positive run. Darwin posted the strongest monthly growth at 1.0%, while Adelaide and Brisbane weren’t far behind. Even Sydney and Melbourne, which had both softened recently, saw consecutive monthly increases—suggesting the downturns in those cities may have bottomed out. Sydney is now just 1.4% below its previous peak, while Melbourne still has a bit of catching up to do, sitting 5.6% below its 2022 high.
Interestingly, the price growth across market segments is also levelling out. For much of the past year, the lower quartile of the market was outpacing the top end, but that’s now balancing. In Sydney, for example, upper quartile values are starting to grow more rapidly again. Historically, we’ve seen more expensive markets respond more strongly to rate cuts, so this isn’t unexpected—it’s just taken a bit longer this time around.
Regional areas continue to outperform the capital cities. Over the past quarter, combined regional values rose 1.4%, compared to 0.5% for the combined capitals. That’s in line with what I’ve been seeing across lifestyle markets like the Sunshine Coast, where demand continues to outstrip supply. Despite already strong pricing in many hinterland and coastal areas, we’re seeing properties sell well above expectations. Just when you think things are starting to level off, another standout sale comes through. It makes you wonder if we’re not already in the middle of a longer-term supercycle, with certain areas defying broader market pressures.
Rental data tells its own story. Although rental growth is slowing, it’s still positive, with the national rental index rising another 0.6% in March. Annual rental growth has eased to 3.8%, down from its peak of 9.7% a couple of years ago. But with vacancy rates at just 1.5%—less than half the pre-COVID decade average—rents are unlikely to come down anytime soon. Gross rental yields have lifted slightly, hitting 3.53% in the capitals and 4.42% in regional areas, but given how high borrowing and maintenance costs remain, the return profile for investors is still being squeezed.
What’s clear from the data is that while we’re seeing more stability, the outlook is still a mixed bag. Affordability remains stretched. The national dwelling value-to-income ratio is back at record highs, and the average buyer with a 20% deposit is still dedicating over 50% of their gross income to mortgage repayments. Population growth has slowed as migration normalises, but housing supply remains well behind where it needs to be. High building costs, trade shortages, and tight profit margins are all weighing on new supply—meaning the demand/supply imbalance isn’t going away anytime soon.
CoreLogic reports that rental prices have risen 38.4% over the past five years, while at the same time wages have only increased by 15.4%. To me, this represents a serious problem moving forward. Affordability is being stretched to its limit, leaving many renters struggling to make ends meet and more first home buyers locked out of the market altogether. The government needs to step in with strategic, long-term solutions to Australia’s housing crisis. Short-term fixes and empty promises won’t win my vote. The time for genuine action is now if we want to provide secure, attainable housing for future generations.
That’s where I think our Sunshine Coast market has a big advantage. With lifestyle appeal, strong migration from interstate, and limited housing availability, our region is better positioned to hold value and potentially continue growing, even if broader national trends become more subdued. I’ve personally seen buyer confidence returning, especially with another rate cut expected in April and possibly more to follow later in the year. Lower rates mean improved borrowing power, and as soon as that starts flowing through the system, demand will lift even more. That’s good news for sellers—but for buyers, it could mean more competition and rising prices once again.
So, while there’s still plenty to watch, we’re clearly in a more positive space than we were just a few months ago. The signs of recovery are stronger, the momentum is building, and for well-located, quality homes—particularly here on the Coast—it’s looking like a promising season ahead.
If you’d like to talk about how this impacts your plans to buy or sell, reach out to me and the team at Martinuzzi Property Group. We’re here to help you navigate it all with confidence.
