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Mid-sized capitals soar as Sydney and Melbourne stall
According to Cotality’s Home Value Index for March, the property market has begun to diverge across the country, with mid-sized capitals maintaining their 2025 momentum, while Sydney and Melbourne stalled.
Data showed that all mid-sized capitals lead the way in growth value, with Perth, Brisbane, Adelaide, and Darwin remaining at their peak prices.
Across February, Perth recorded the highest home price growth, jumping by 2.3 per cent, adding more than $22,500 to the median dwelling value.
Brisbane, Adelaide, and Hobart also showed resilience in the face of the rate rises, up by more than one per cent over the month.
On the other end, Sydney and Melbourne felt the effects of February’s rate rise the most, with buyer confidence remaining flat.
The two cities were also the only ones to record a drop in dwelling values of 0.1 and 0.4 per cent, respectively, over the previous three months.
Cotality research director Tim Lawless said the pace of growth across the country had split into two clear tracks, with the mid-sized capitals outperforming the major cities.
“The clear slowdown in housing conditions across Sydney and Melbourne could signal an easing in growth conditions elsewhere down the track, but for now, the mid-sized capitals continue to see support from extremely low inventory levels, which is boosting the growth in values,” Lawless said.
The data found that Perth’s rapid price growth was supported by its low vacancy rate and low number of listings, with recent REA data showing vacancy at just 1.11 per cent.
Over the four weeks to 22 February, the number of listings available in Perth was down 48 per cent on the city’s five-year average, according to Cotality’s research.
The trend of low listings driving prices higher remained consistent across the other mid-sized capitals, Brisbane and Adelaide, which recorded rates 31 per cent and 23 per cent lower than the five-year average, respectively.
New listings
While total listing numbers might be down in Sydney and Melbourne, both cities saw an increase in new listings.
Sydney’s volume of new listings was 9.7 per cent higher than the previous five-year average, while Melbourne recorded an increase of 12 per cent over the same period.
Lawless said the increase in listing volume was indicative of sellers looking to capitalise on the tightened market.
“Vendors are looking more motivated in Sydney and Melbourne, possibly looking to beat a further softening in selling conditions as clearance rates ease and demand slows.”
“If the typical seasonal pattern holds, the flow of new listings is likely to strengthen leading into Easter.”
The pricepoint difference
The data showed an opportunity for buyers at the more affordable end of the market, with prices rising in the first home buyer price bracket.
In Sydney, lower quartile prices rose by 0.8 per cent over February, while at the highest price point, values fell by 0.9 per cent.
He said the value increases were due to high competition at the first home buyer price points.
“First home buyers, investors and subsequent buyers are all competing across this sector of the market, while credit is less available across the higher price points due to serviceability constraints.”
Additionally, Lawless said the data showed the market was becoming more segmented by price points, being shaped by affordability.
“We continue to see scope for some further upward pressure on housing values, although growth is likely to be modest and increasingly uneven across market segments.”
“Price growth is expected to be most evident at the lower end of the market, where competition among buyers is concentrated, and policy support is most effective.”
“In contrast, higher-priced segments are likely to show softer outcomes due to less demand amid serviceability constraints,” he concluded.