Australia’s housing market is regaining momentum, with interest-rate cuts reigniting activity in previously overlooked areas.
National home prices hit a record high of $831,288 in May, according to CoreLogic, marking four straight months of growth. Prices are now 4.12% higher than a year ago, with gains led by lower-priced segments.
With affordability improving and sentiment stabilising, buyers are returning to capitals and regions where house price growth has lagged.
Quarterly and annual house price growth data reveal a recovery in previously underperforming cities. Darwin leads the resurgence, up 2.8% over the past three months and 6.1% over the year.
Melbourne, which has lagged since the pandemic, is also rebounding. House prices in the inner city jumped 3.5% in the quarter, with growth also in the north west (2.2%). Units rose fastest in the inner city (5.5%), south east (3.3%) and north west (2.8%).
“Melbourne is now catching up after a sustained period of underperformance relative to other capitals – a common pattern in cyclical housing markets,” said Eleanor Creagh (pictured), REA Group senior economist.
“The recent rate cuts and prospects of further easing have improved borrowing capacity and boosted buyer confidence, providing a catalyst for a gradual rebalancing.”
Regional hotspots include the Mornington Peninsula (2.8%), Bendigo (2.3%), and Illawarra (nearly 2%).
Newcastle and Lake Macquarie topped the national growth chart, with 3.6% quarterly house price growth. Salt Property’s Lyndall Allan said investor interest had surged.
“We always have a steady interest from people wanting to move to Newcastle but of late we have a much bigger influx of investors,” Allan told realestate.com.au. “Rentals are very strong here so it makes good investment sense.”
In Sydney, the inner west, south west, Parramatta, and Sutherland saw the strongest house price growth. Unit prices jumped most in the northern beaches.
“People still have 2021 in their memory when the market jumped up about 25%,” Pulse Property Agents director Ben Pike told realestate.com.au. “Week on week we’ve seen more engagement with listings online, more enquiries, and open home numbers have tripled.
“Instead of having one or maybe two good buyers per property, you’re looking at five or six. The most competitive price range for freestanding homes is between $1.5 million and $2.5 million.”
Not all markets are running hot. Previously high-growth areas, such as parts of Perth, are now showing signs of cooling.
In Perth’s north east, house prices fell 0.8% last quarter. Mandurah’s house price growth slowed to just 0.7%, while unit prices there declined 0.8%. Bunbury’s values were flat.
“In many cases, slower growth simply signals the market is stabilising, not reversing,” Creagh said. “However, if slowing growth is accompanied by accumulating listings, a downturn in the economic cycle, or demand and sentiment shocks, it may foreshadow a more sustained downturn.
“Markets like Mandurah and Bunbury have recorded persistently strong growth in recent years… The recent slowdown in these regions is consistent with the late-cycle dynamics.”
In NSW, unit prices dipped by 1.1% in Sydney’s east and 1.5% on the Central Coast. Melbourne’s west saw unit prices fall 2%, now down 7.1% from a year ago.
In Queensland, the Mackay–Isaac–Whitsunday region posted a 1.7% quarterly house price drop. Even Townsville – the national leader for annual growth – has slowed. Quarterly growth there was 2.3%, about half last year’s pace.
“Growth has decelerated slightly from peak levels, moving past its growth peak but still performing well in relative terms,” Creagh said.
Explore Property’s Jools Munro added: “We are definitely seeing a decrease in the number of interstate investors… We’ve still got a lack of supply to keep the pressure on the value of homes, but certainly we are starting to see our days on market for houses blow out.
“But we are seeing more owner occupiers buy our houses so it's good news for our locals.”
