Slowing overall growth in an increasingly segmented market
Property values across Australia showed an overall slowing of growth over the quarter, moderating from 3.1 per cent to 2.1 per cent in the most recent figures.
The past quarter has seen an emerging divergence across the capital city housing markets, with Melbourne and Sydney values softening while the mid-sized capitals continue to record gains.
Perth is showing the strongest trend, with home values increasing by 6.8 per cent over the quarter, followed by Brisbane and Adelaide recording rises of 4.8 and 4.3 per cent respectively. Melbourne and Sydney have been less resilient to the February rate hike and the drop in sentiment, with home values down -0.4 and -0.1 per cent over the rolling quarter.
Stronger growth at the lower end
Most cities are continuing to see homes at the lower end of the market driving growth, especially for houses. Across the combined capitals, lower quartile house values were up 1.3 per cent compared with a 0.3 per cent rise across the upper quartile.
Intense competition for more affordable houses is supporting stronger growth conditions at lower price points where first home buyers, investors and mainstream demand is concentrated.
The regions
Regional housing conditions continued to show a stronger growth trend relative to their capital city counterparts, with values across the combined regionals index rising 3.2 per cent over the quarter – compared to capital city values which recorded 1.8 per cent increase.
The result marks a clear shift in market momentum as affordability, renewed internal migration and competitive conditions direct more buyers towards regional areas.
Auction clearance rates and housing demand
New listings remain low across most of Australia. According to Cotality, the number of homes advertised for sale is down 5 per cent compared to the same time last year, and 9.2 per cent below the five-year average.
Perth listings remain 48 per cent below their five-year average, with Brisbane 31 per cent below and Adelaide 23 per cent lower.
Advertised stock levels are also low in Sydney and Melbourne, although both cities have seen a clear pickup in the amount of new listings through February.
Looking ahead
Market sentiment is becoming more cautious due to the February cash rate increase which eroded borrowing power and repayment capacity as well as fears of further rate hikes, this, coupled with poor affordability is tempering the pace of growth.
Credit conditions are also tightening, with APRA’s introduction of limits on high debt-to-income (DTI) lending from February 1 which set the tone for a more cautious lending environment in 2026.
On the positive side, several factors continue to support housing values. Housing supply remains low. Employment figures point to a tight jobs market, even as real wages have come under pressure, while government support for first home buyers is also providing some offset to broader affordability challenges.
These factors point to a more segmented and softer market through 2026, with growth more evident in the lower end of the market and the regions.
Dwelling values over the quarter
Melbourne
The Victorian capital decreased by -0.4 per cent over the quarter, taking the city’s median dwelling price to $826,132. Investors should take note that the gross rental yield figure for Melbourne is 3.7 per cent.
Sydney
Sydney also showed a decrease in property values over the per cent of -0.1 per cent, resulting in a median of $1,296 million. The gross rental yield for the Harbour City remains the lowest of the capitals at 3.0 per cent.
Brisbane
The Queensland capital continues to record the second most expensive spot for dwelling values at $1,080 million and a quarterly rise of 4.8 per cent. Brisbane has recorded a gross rental yield of 3.3 per cent.
Canberra
The national capital recorded a rise of 1.3 per cent during the quarter with the median now sitting at $903,374. For Canberra, the gross rental yield is 4.1 per cent.
Perth
Perth again recorded the strongest increase of all the capitals, growing by 6.8 per cent over the quarter and taking its medium to $989,211. Perth recorded 3.8 per cent gross rental yield.
For more information about how you might be able to purchase a property in the current market, get in touch with us today.
Note: all figures in the city snapshots are sourced from: Cotality national Home Value Index (March 2026)
