Australian home values continued to climb in March, rising 0.7 per cent for the month and pushing quarterly growth to 2.1 per cent, according to new data from Cotality. But beneath the national uptick lies a widening gulf between the country’s major housing markets.
Perth remains the standout performer, with prices surging 7.3 per cent in the first quarter alone. In stark contrast, Australia’s two largest cities have slipped backwards: Melbourne is now 0.9 per cent below its November peak, while Sydney has fallen 0.4 per cent.
Cotality’s head of research Gerard Burg said the “widening divergence” comes down to two key factors demand and supply.
“In Perth, we still have this strong imbalance between demand from strong population growth over the last few years and supply that has really remained constrained,” he said. “You’ve got this large pool of buyers competing for a really small pool of properties.”
Sydney and Melbourne, he noted, tell a very different story.
“In Sydney, affordability constraints are a huge issue … there’s a limited pool of buyers who can really look to make a purchase of that kind,” Burg said. With the median property value sitting at around $1.3 million, he added, price levels are increasingly “becoming a constraint on the market”.
Melbourne’s softer performance, meanwhile, reflects a well‑supplied market combined with the drag of higher interest rates.
Despite the mixed results in the biggest cities, every other capital recorded growth in both March and the first quarter, with the combined median value across capitals now exceeding $1 million.
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