According to CoreLogic, the housing market is showing early signs of slowing, with national home values declining by 0.2% in January. Melbourne saw the sharpest drop at -0.6%, while Brisbane and Perth remained in positive territory but showed signs of cooling. Adelaide, which recently led to price growth, is also slowing.
Regional markets, however, continued to climb, with values rising 0.4% in January. Townsville led the gains with a 25.8% annual increase, followed by Central Queensland (20.1%) and Mackay (19.5%). While demand in regional areas remains strong, CoreLogic’s Tim Lawless noted that the market has shifted away from pandemic-driven migration trends.
Home sales have softened, with annual transaction volumes falling from 535,000 in October to 526,000 in January. The rental market has also slowed, with rents declining in Sydney (-0.4%) and Melbourne (-0.6%).
With speculation growing around interest rate cuts, market forecasts suggest the RBA could make three to four 25-basis-point reductions in 2025. While lower rates could provide some relief for borrowers, affordability remains a key challenge, especially in cities with sharp price increases like Perth, Adelaide, and Brisbane.
“All things considered, the likelihood of a significant growth cycle over the coming year remains low,” said Lawless.
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