Australia’s housing market is still edging higher, but the upswing is clearly losing steam.
REA Group data shows national home prices rose 0.3% in March, taking the median value to $908,000 and 9.4% higher than a year ago. That equates to about $94,800 added to the median home over 12 months, but the pace of gains is easing.
“National home prices rose again in March, extending the current upswing, but growth is slowing,” REA Group senior economist Eleanor Creagh (pictured) said. “Momentum has eased, with more than three quarters of SA4 regions recording a deceleration in monthly growth relative to February.”
With momentum easing, the interest‑rate environment is turning more restrictive. The Reserve Bank’s second straight 0.25 percentage point hike has lifted the cash rate to 4.1%, with another rise tipped for May. Canstar estimates this has reduced maximum borrowing capacity by about $25,000 for a single average‑income borrower and $49,000 for a couple.
Capital city prices also rose 0.3% in March, lifting the median to $1.016 million. Brisbane posted the strongest monthly rise at 0.7%, followed by Perth at 0.5% and Adelaide at 0.4%. On an annual basis, Perth remains the standout, up 20.9%, with Brisbane, Darwin, and Adelaide also recording double‑digit growth.
Across the capitals, houses and units are showing similar annual growth, but March unit values grew at more than twice the pace of houses.
Regional prices climbed 0.4% in March and are now 11% higher year‑on‑year, continuing to outpace the capitals over one‑ and five‑year horizons on the back of relative affordability and lifestyle appeal.
Creagh warns that “Recent rate rises will weigh on buyer sentiment, borrowing capacity, and erode already poor affordability, though a resilient labour market, population growth, and first-home buyer support continue to underpin demand against limited supply.”
She concludes that “Overall, the market is shifting into a slower-growth phase, with a rising likelihood of flat or declining prices in some markets in the months ahead, even as structural supply shortages cushion the moderation”.
If the big four banks’ forecasts prove correct and the RBA lifts again in May, the cash rate would rise to around 4.35% and unwind the three cuts delivered in 2025, further tightening home‑buying budgets.
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