NextFin News - Australian home price growth slowed to its weakest monthly pace in fifteen months this April, as the weight of high interest rates and a surge in new listings finally began to erode the market’s post-pandemic resilience. National dwelling values rose by 0.6% in April, according to data released by CoreLogic on Thursday, marking a deceleration from the 0.7% gain recorded in March and the lowest monthly increase since January 2025.
The cooling trend was most visible in the nation’s largest markets. Sydney and Melbourne, which together account for a significant portion of Australia’s total housing wealth, saw prices dip by 0.1% and 0.2% respectively over the month. This divergence highlights a growing fragmentation in the national landscape, where the "Big Two" cities are struggling under the pressure of affordability constraints while mid-sized capitals continue to defy the broader slowdown. Perth remained the standout performer with a 2.5% jump, followed by Brisbane at 1.8% and Adelaide at 1.2%.
Tim Lawless, Research Director at CoreLogic, noted that the market is currently navigating a "clear turning point" in the cycle. Lawless, a veteran analyst known for his data-driven and often cautious outlook on property cycles, suggested that the combination of persistent inflation and the Reserve Bank of Australia’s (RBA) hawkish stance has fundamentally shifted buyer sentiment. His analysis indicates that while the national index is still technically rising, the momentum has shifted from a broad-based rally to a localized struggle for value.
The deceleration comes as U.S. President Trump’s administration continues to monitor global inflationary pressures, which have kept central banks, including the RBA, on high alert. In Australia, the central bank has signaled that further rate hikes remain on the table to combat sticky service-sector inflation. This hawkishness has pushed mortgage serviceability to record lows, with many prospective buyers now finding themselves priced out of the market or unable to secure the necessary financing from lenders who have tightened their belts.
Supply dynamics are also playing a critical role in this cooling phase. After years of chronic undersupply, the number of properties hitting the market has begun to rise, particularly in Sydney and Melbourne. Total advertised stock levels in these cities are now trending above the five-year average, giving buyers more leverage and longer decision-making windows. In contrast, Perth and Brisbane continue to suffer from a severe shortage of available homes, which explains why prices in those cities are still climbing at more than double the national rate.
While the CoreLogic data points toward a cooling market, some industry participants maintain a more optimistic view. Eleanor Creagh, Senior Economist at PropTrack, argued in a recent report that the underlying demand for housing remains robust due to strong net overseas migration and a tight labor market. Creagh’s perspective, which often emphasizes structural demand over short-term interest rate fluctuations, suggests that as long as employment remains high, a significant price correction is unlikely. This view, however, is increasingly being tested by the reality of a 4.35% cash rate that has yet to show signs of easing.
The rental market offers little relief for those unable to buy. National rents have continued to outpace wage growth, with households now dedicating an average of 33.4% of their pre-tax income to housing costs. This "rental squeeze" has historically pushed some tenants toward homeownership, but with the average national median home value now sitting at approximately $908,000, that transition has become a financial impossibility for many. The gap between the "haves" and "have-nots" in the Australian property market is widening, even as the headline growth figures begin to fade.
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