February 2025 Property Market Update: Sentiment Boosts Growth
03 Mar, 2025
Updated: 03 Mar, 2025
After a brief downturn, the Australian property market regained momentum in February 2025, with CoreLogic’s Home Value Index (HVI) recording a 0.3% increase nationally. Improved buyer sentiment, driven by expectations of lower interest rates that became realised, has contributed to this turnaround. However, affordability constraints and supply-side pressures continue to shape the market.
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| State/City | HVI Change (%) | Description |
|---|---|---|
| Sydney | 0.3% | Growth led by upper-quartile properties as high-value markets rebound. |
| Melbourne | 0.4% | First increase in 10 months; a sign of renewed buyer confidence. |
| Brisbane | 0.2% | Growth slows compared with previous months but remains positive. |
| Adelaide | 0.3% | Maintains steady growth, leading rolling quarterly gains at 1.2%. |
| Perth | 0.3% | Market slows with downward revisions, dragging quarterly change to just 0.3%. |
| Hobart | 0.4% | One of the strongest performers in February after previous declines. |
| Darwin | -0.1% | The only capital city to decline this month. |
| Canberra | 0.2% | Modest recovery after recent softening. |
Regional vs. Capital Cities
Regional markets showed stronger growth trends than capital cities in February, with values across the combined regional index rising 0.4% over the month and 1.0% over the rolling quarter, compared with a 0.3% monthly rise and -0.4% quarterly fall in capital city values. However, Sydney, Melbourne, and Hobart outperformed their regional counterparts, signalling renewed demand in major metro areas.
Rental Market Overview
National rents rose 0.6% in February, marking the strongest monthly gain since May 2024, but well below the 0.9% rise recorded in February last year. The annual increase slowed to 4.1%, making it the weakest growth rate since early 2021. Sydney, Melbourne, and Brisbane unit rents have eased after growth in previous years, reflecting increased housing availability and shifting migration trends. Meanwhile, rental yields have shown slight improvement as rental prices continue to outpace home values in certain markets.
Market Activity And Selling Conditions
New property listings have declined compared with last year, tightening supply and putting some upward pressure on prices. Auction clearance rates have improved, returning to historical averages, which suggests a lift in buyer confidence. However, inventory levels vary across cities. While Sydney, Melbourne and Hobart have shown an increase in stock levels, Perth, Adelaide and Brisbane continue to experience limited supply, making conditions more competitive for buyers in these regions.
Market Forecast
- Interest-rate cuts remain a key factor. While financial markets expect rates to fall to 3.55% by year’s end, economists forecast up to three more cuts.
- Affordability pressures persist, limiting broad-based price growth despite rising sentiment.
- Reduced migration levels may ease rental demand and moderate housing market pressures.
