Australian Housing Market Trend Report: January 2025
The Australian housing market experienced a slight downturn in January 2025, continuing the softer trend observed at the end of 2024. National home prices declined by 0.08% in January, although they remain 3.82% higher compared to the previous year1.
Capital Cities vs. Regional Areas
Capital cities led the decline, with prices falling 0.16% in January. In contrast, regional areas showed resilience, recording a 0.12% increase in prices over the month1. This divergence highlights the ongoing trend of regional areas outperforming capital cities, with annual price growth in regional areas (+4.47%) surpassing that of capital cities (+3.56%)1.
City-by-City Breakdown
Price Movements:
- Hobart: -0.46%
- Melbourne: -0.30%
- Sydney: -0.21%
- Darwin: -0.11%
- Canberra: -0.10%
- Adelaide: -0.07%
- Perth: Flat (0%)
- Brisbane: +0.08% (only capital with price rise)1
Annual Performance:
Perth (+15.38%), Adelaide (+12.41%), and Brisbane (+10.44%) remained the strongest performing capitals over the past year, despite a recent slowdown in growth1.
Market Drivers
Several factors contributed to the softening of the market:
- Surge in housing stock, increasing buyer choice
- Persistent affordability constraints
- Weaker economic conditions
- Sustained higher interest rate environment1
Future Outlook
Despite the recent downturn, the market shows signs of potential recovery:
- Interest rate cuts are anticipated in the near future
- Lower interest rates are expected to boost borrowing capacities
- Improved affordability and buyer confidence may drive renewed demand and price growth
However, the pace of home price growth is likely to be more modest compared to recent years due to the current stretched affordability1.
Long-term Perspective
It’s important to note that despite recent fluctuations, the Australian housing market has shown significant growth since the onset of the COVID-19 pandemic. National home values are 45.0% higher compared to March 2020.
Attribution: Data and insights sourced from PropTrack Home Price Index – January 2025 (https://www.proptrack.com.au/wp-content/uploads/2022/04/PropTrack-Home-Price-Index-January-2025.pdf)
