The Australian property market remained resilient in January, with national home values holding steady despite declines in major cities like Sydney and Melbourne. This unexpected stability has fueled speculation that now might be the right time for buyers to enter the market before expected Reserve Bank rate cuts trigger a surge in demand.
Market Steadies as Home Values Defy Expectations
Fresh data from CoreLogic reveals that national property prices were flat in January, defying the downward trend observed in late 2023. This follows a 0.1% dip in December, which had suggested the market was losing momentum.
CoreLogic research director Tim Lawless admitted the figures caught him by surprise, indicating that while January is traditionally a slow month for transactions, the market’s resilience suggests any downturn may be short-lived.
“The trend leading into the end of last year was clearly one of losing momentum, and it looks like that may have been either interrupted or paused through January,” Lawless said.
Despite the slight declines in Sydney (-0.6%) and Melbourne (-0.4%), property prices in Brisbane, Perth, and Adelaide continued to strengthen.
Why Buyers Are Taking Notice
With the Reserve Bank of Australia (RBA) expected to ease interest rates later this year, market analysts predict a significant boost in borrowing power. Lower rates tend to stimulate demand, pushing up prices—meaning buyers looking to secure a home at current values may have a limited window.
NAB executive Andy Kerr sees the current market conditions as a golden opportunity, particularly for first-home buyers.
“With inflation easing, there’s growing confidence that interest rate cuts are on the horizon. Historically, when rates start to fall, we see confidence and activity lift in the market,” Kerr explained.
New South Wales is leading the charge, with first-home buyer loans rising sharply as many take advantage of increased property listings and relatively stable prices.
Supply Constraints Could Keep Prices High
While property construction is beginning to recover from a prolonged slowdown, supply remains a major concern. Even as building approvals are expected to show improvement when new figures are released, the lag between approval and completed homes means housing shortages will persist in many regions.
Lawless noted that this lack of supply could keep a floor under home values, preventing significant declines even as interest rates fluctuate.
Regional Markets Gain a Second Wind
Beyond the major cities, regional property markets are once again outperforming capital cities. After an initial pandemic-driven boom, followed by a cooling period, regional home values are now rising faster than those in metropolitan areas.
Interestingly, the top-performing regional markets are not the usual commuter hubs like Newcastle, Wollongong, or the Gold Coast, but rather rural towns with strong economic drivers.
Townsville in North Queensland has led the pack over the past 12 months, with robust growth also seen in Gladstone and Rockhampton—regions benefiting from resource-related infrastructure and mining activity.
“We’re seeing growth concentrated in areas where employment is driven by mining or infrastructure projects,” Lawless explained.
The next major indicator will come when the Australian Bureau of Statistics (ABS) releases data on dwelling approvals, shedding light on whether the nation is making progress on easing its housing shortage.
