Australia’s housing market is moving into a more uneven phase, with conditions sharply diverging between the biggest capitals and the rest of the country.
Cotality’s national home value index rose 0.7% in March, lifting dwelling values 2.1% over the quarter. But Sydney and Melbourne are now edging into decline while Perth, Brisbane, and Adelaide post rapid gains.
Cotality research director Tim Lawless (pictured) said that “since the end of November 2025, Melbourne values have retreated by -0.9% and the Sydney market is down -0.4%,” with the softer trend lining up with lower auction clearance rates and more stock on market.
Westpac economist Luka Belobrajdic noted that the “latest data continue to highlight a divergence across markets, with the changed policy rate outlook weighing most heavily on Sydney and Melbourne, where price growth has softened further.”
In contrast, Perth is surging. Cotality reports home values there jumped 2.5% in March and 7.3% over the quarter.
“In dollar terms, the 7.3% rise in Perth home values over the quarter has added approximately $69,000 to the median dwelling value,” Lawless said, adding that advertised listings remain about 40% below the five‑year average.
Brisbane and Adelaide also logged strong monthly gains of 1.8% and 1.2% respectively, with annual growth running in double digits.
Regional markets are holding up better than many expected. Values across regional Australia rose 1.1% in March and 3.3% over the quarter, with regional WA and Queensland standouts as tight supply and population growth continue to support demand.
Across most capitals, cheaper homes are outperforming prestige stock, with Sydney’s upper quartile values down 1.8% over the March quarter while lower quartile values rose 1.8%.
Lawless said “strength across the lower quartile value tier is tied to increased competition for lower priced housing,” as serviceability constraints push buyers down the price ladder and into more modest dwellings.
For brokers, that means more clients targeting smaller loans, higher‑density stock or fringe locations to make mortgage repayments stack up under tighter assessment rates.
Belobrajdic warned that with more rate rises expected and the economy facing a global energy shock, “additional headwinds in the Australian housing market with a further deacceleration in price growth are looking increasingly likely.”
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
