It was a good indicator overall, given that regional housing values have actually been quite resilient and strong – consistently outpacing capital city gains by April 2025. Moderated data from Cotality indicates that regional home values spiked up 0.6 percent on the month. By comparison, capital cities only experienced a 0.2 percent increase. This ongoing trend represents a profound change in what buyers are looking for. With urban prices escalating, many would-be urban homeowners are looking to the regions.
Perth was an unexpected champion – the city with the biggest annual increase, up a staggering 10 percent. Yet Hobart demonstrated an extreme divergence in growth between houses and units. House prices went up by 1.4 percent but unit values went down by 1.1 percent in the last quarter. The national median house value currently is $825,349 and continues a long, strong upward trend and has had an upward trajectory despite regional fireworks.
National Home Prices on the Rise
Nationally, home prices rose 0.2 percent for the month of April and 3.7 percent annually. The annual pace of their gains has slowed to only 3.2 percent, the slowest yearly increase since August of last year. Industry expert Eliza Owen, for one, expects house prices to keep going up. She thinks the increase will come just not as quickly or dramatically.
Owen emphasized the role that economic stressors play on the current housing market. One, because he was so certain that all the headwinds and tailwinds would result in price increases throughout the year, at least that’s what he told me, chiefly due to lower interest rates. And that even though business activity is likely to see upward pressure on prices, rising potential economic headwinds would still shape the underlying growth path.
When looking at regional performance, every state was up year on year with the exception of Melbourne and Canberra. Melbourne’s values dropped by 2.2 percent over the month, with Canberra slipping down marginally by 0.6 percent. These opposing market forces are a sign of the different dynamics at play in markets around Australia.
Rental Market Shows Firm Growth
The rental market stood out for its incredible resiliency. The national rental index rose by 0.6 percent over the quarter. This upward trend is music to the ears of landlords and those looking to invest in the booming rental industry. Owen commented on the evolving rental landscape: “It all points to this picture of annual rent growth continuing to slow, and rent values stabilising, albeit at very high levels.”
Owen further emphasized that the current rental increases are significantly lower than previous years: “a good sign for renters, and it’s well down from the eight to 10 percent increases we’d seen in 2021, 2022 and 2023.” At the same time, this stabilization should ease some pressures on tenants that have experienced rising costs in recent years.
Even with these encouraging signs in the rental market, Owen warned that a lack of economic certainty may still bring hardships on the horizon. As she recently said, “Economic uncertainty will slow our momentum. It is likely to have a profound effect on the labor market. It’s an evolving picture, but ultimately, I think we’re looking at a more modest growth rate for 2025.”
The Future Outlook for Housing
As Australia heads towards an upcoming federal election, other economic factors could be about to take housing in a different direction. New listings per month for sale across the combined capitals are down by nearly a third. In the last four weeks before April 27, that number dropped to 19,650. This drop potentially amplifies supply tightening as demand still keeps coming.
Eliza Owen remarked on the current climate: “Ultimately, what we saw from the housing market is that strong lending conditions and people being able to service their mortgage empowered them to stay back from buying and selling.” She noted that outside factors including tariff announcements and public holidays have consecutively affected transaction activity.
As regions continue to show promise and national prices edge higher, stakeholders in the housing market are encouraged to remain vigilant in monitoring trends and adapting strategies accordingly.
