Prestige property rebound hints at Aussie housing market recovery

Australia’s metro housing market appears to be in the early stages of recovery, with a traditional bellwether segment rebounding strongly in February, data from housing market analyst CoreLogic reveals.

The high-end property segment – historically a bellwether for the health of the broader housing market, according to housing market researcher CoreLogic – saw a 50-basis point turnaround in February.

March data from researcher’s Home Value Index showed the upper quartile of capital city properties – representing the top 25% of homes by value – has rebounded strongly since January’s -0.3% drop, growing +0.2% in February.

The uptick in the high-end market comes after the Reserve Bank of Australia’s decision to cut the policy rate, with CoreLogic noting that this market is among the most sensitive to rate changes.

Nevertheless, despite the high-end gains, lower and middle segments still outperformed in comparison, with the lower quartile growing 0.4% in February after a flat result in the previous month.

Overall, in the three months to February 2025, nationwide housing values are down just -0.1%, propped up by strong growth in the regional dwelling values (up +1.0%), continuing its trend of outperforming the capitals.

Despite remaining in negative territory, the nation-wide figure is up considerably on the three months to January, where the quarterly measure sank to -0.4%.

Sydney and Melbourne’s high-end property markets rebounded strongly in February, with an upwards of 250 basis point turnaround for some of Sydney’s prestige suburbs, month over month.

Overall, Sydney dwelling values are now just -1.6% below their record high, hit in September 2024, while Melbourne dwelling values are down -6.4% below their record high, reached in March 2022.

Brisbane, Adelaide and Perth’s housing markets, meanwhile, are currently trading at record high values. Hobart’s dwelling values, despite leading monthly gains with a turnaround of up +0.4% recorded in February, remain well below (-11.9%) the highwater mark set in March 2022.

Canberra’s market also saw +0.2% bump in the month, though it remains -7.1% down on the record high set in May 2022.

Overall, despite strong gains in February, overall national values are up just 3.8% over the year to February, their lowest annual growth rate since the 12 months to August 2023 (at 2.6%).

Commenting on the March data, CoreLogic economist Kaytlin Ezzy said the share turnaround for top quartile dwellings remains the figure to watch, serving as a bellwether for broader housing market recoveries across Australia’s metro areas.

“If this momentum continues, the quarterly change in upper quartile values could turn positive and potentially outperform the lower quartile and middle market for the first time since August 2023,” Ezzy said.

Overall, market gains were in direct response to the February rate cut, with the daily trend showing a material Improvement in the Home Value Index prior to the cut.

“This suggests sentiment was also at play,” Ezzy said.

“If buyers are out in market expecting they can access more finance, this may have contributed to a strong market response.”

“The upper 25% of values in Melbourne, Sydney and Hobart – which our research shows have historically been some of the most sensitive to rate changes – recorded the largest Improvements,” she said.