National housing values rise amid falling interest rates

Cotality data showed that in June, nearly all regions recorded monthly and quarterly value gains, with Hobart and regional Tasmania being the only areas to post declines at -0.2 per cent and -0.4 per cent, respectively.

Over June, capital cities outperformed regional areas for the second straight month and recorded a quarterly growth of 1.4 per cent.

Cotality’s research director, Tim Lawless, said that despite stronger quarterly gains in the regions at 1.6 per cent, momentum is shifting back towards capital markets.

Lawless said the capital city’s growth had been a result of the multiple interest rate cuts.

“The first rate cut in February was a clear turning point for housing value trends. An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher,” Lawless said.

Darwin led the monthly and quarterly capital growth with a 1.5 per cent and 4.9 per cent jump, respectively, pushing values to a new record high.

“Darwin’s 1.5 per cent rise through June was enough to take dwelling values to a new record high, finally surpassing the mining boom peak recorded just over 11 years ago in May 2014,” Lawless said.

Perth followed suit, recording a 0.8 per cent increase in June and a 2.1 per cent quarterly growth.

Brisbane rounded up the top three, with a 0.7 per cent monthly value increase and a 2 per cent growth over the quarter.

Lawless said that Perth and Brisbane have continued their five-year lead, with values up 81.1 per cent and 75.1 per cent since June 2020.

Sydney, Melbourne, and Adelaide all recorded a 1.1 per cent quarterly growth, with a June increase in home values ranging between 0.5 per cent and 0.6 per cent.

Lawless said that while the national housing market is gaining momentum, it is being built on sales volume and stock.

Data showed that housing turnover for the first half of the year has been tracking at an annualised rate of 4.9 per cent, just below the decade average of 5.1 per cent.

Similarly, advertised supply levels have been low, recording a 5.8 per cent decrease compared to the same time last year and a 16.7 per cent decrease compared to the five-year average.

“Although demonstrated demand is tracking slightly below average, advertised supply is scarce, creating a more balanced market for buyers and sellers,” Lawless said.

“Improved selling conditions can be seen in auction clearance rates, which have risen to slightly above the decade average in the last two weeks of June, holding around the mid-60 per cent range.”

He said that while national home values rose 3.4 per cent over the financial year, recent momentum suggests the figure will climb in the second half of 2025, with a forecast of 5.8 per cent.

“Given the upside risk that housing values will accelerate further from here as interest rates reduce, the reality is we will likely see home values rise by more than this over the coming 12 months.”

“However, despite the prospect for lower interest rates, affordability constraints will likely temper the extent of a housing market upswing,” Lawless concluded.

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