Who We AreMarket InsightsMessage Us

Sydney and Melbourne markets cool while others retain heat

May 29, 2023
Andy Webb

We're now a quarter of the way through 2022 and Australia's property market is producing some interesting new trends. 

Data from CoreLogic's latest report shows that growth in the country's two biggest markets has flatlined, while other cities and regions have had an unexpected bump through March. 

Which direction will things go next? Find out in our March 2022 Australian property market update. 

National housing values: March 2022

After the past 15 months of property market mania, Australia's median house price hit a new milestone in March, breaking $800,000. Overall, national property values were up +0.7 per cent for the month. 

There are a few different stories unfolding right now, though, and those figures only tell part of what's happening. 

March brought a mixed bag of price growth, or in some cases, corrections. Source: CoreLogic

The big headline is that growth in Sydney and Melbourne has well and truly stagnated. Both cities saw small price corrections in March, culminating in very minimal gains for 2022 so far. 

Hobart also trailed other cities in a surprising deviation from relatively strong conditions recently. 

Elsewhere around the country, price growth had a boost. Brisbane and Adelaide, two cities having a major resurgence in recent months, both delivered gains of around +2.0 per cent. 

Perth also had an uptick after its borders reopened, while Canberra held relatively steady for another month. 

With strong momentum behind them, our regional markets posted growth of another +1.7 per cent. South Australia, Queensland and NSW were the standouts. 

Looking at 2022 so far, the median Australian property has added around $17,000, or +2.4 per cent, to its value. By comparison, that's around half of the growth rate we saw in Q1 or 2021.

Wondering what your home might be worth?

Get a free property report with recent sales in your area and an estimated property value

Get your free property report
Get your free property report


Despite the uptick, the Australian property market has passed its peak

A boost in growth last month wasn't enough to convince Tim Lawless, CoreLogic's research director, that the market is still yet to reach its peak. 

"Virtually every capital city and major rest-of-state region has moved through a peak in the trend of growth some time last year or earlier this year," he said. 

That trend is most visible in Sydney where affordability is a major issue, listings are rising and sales activity is falling. 

There has been a clear slowdown in growth for Australia's four largest markets. Source: CoreLogic

"There are a few exceptions to the slowdown, with regional South Australia recording a new cyclical high over the March quarter and some momentum is returning to the Perth market where the rate of growth is once again trending higher since WA opened its borders."

While for most markets the peak rate of growth may be in the past, that doesn't mean prices are about to start winding back across the country. 

In Brisbane and Adelaide, the number of home sales has in fact increased when compared to March last year, so there are still plenty of buyers out there. 

Each market's growth is still being dictated by new listings

There is a strong correlation between the available supply in different cities and regions and how growth is performing. 

Looking Australia-wide, the total number of listings available on the market are -30 per cent lower than the five-year average. But it's important to dig deeper as that number doesn't tell the full story. 

Nationally, new listings are still on the up, but that changes when looking at the city and region level. Source: CoreLogic

Total supply in Sydney and Melbourne has risen significantly in the past year. In Melbourne, listings have surged +8 per cent beyond the five-year average. Sydney is just -2.6 per cent shy of that same average, so there's a genuine move towards normality. 

"With higher inventory levels and less competition, buyers are gradually moving back into the driver's seat," Mr Lawless explained.

"That means more time to deliberate on their purchase decisions and negotiate on price."

The opposite is going on in Brisbane and Adelaide, with listings in both capitals falling -40 per cent below the five-year average. Essentially, supply just can't keep up with demand from buyers. 

Total stock on the market is up in Sydney and Melbourne on an annual basis, but it's well down in Brisbane and Adelaide. Source: CoreLogic

Regional markets are still experiencing the same dynamic, particularly the most sought-after locations in South Australia, NSW and Queensland. As long as that dynamic persists, prices may continue to rise. 

Investor activity could surge thanks to a tight rental market

Changes within the rental market are another major theme to come out of Q1 2022.

According to SQM Research, rental vacancy rates have hit an incredible 16-year low, and the rental market is only getting tighter. 

National vacancy rates have fallen to only 1.2 per cent, a historic low point. Source: SQM Research

Louis Christopher, SQM's managing director, said "Given a dramatic tightening in vacancy rates, we are seeing an ongoing acceleration in weekly market rents across the capital cities. This situation now represents a significant rental crisis across the country."

It's rough news for renters, who are likely to see worsening conditions in the near future, but it's also an opportunity for investors. 

With such a heated rental market, rents are rising fast, and while interest rates remain at record lows that means higher yields for landlords. 

Until a point when the high rate of inflation is matched by interest rate hikes, cashflow will keep improving on rentals, and that's likely to reignite some investor interest. 

It might also have the effect of pushing some renters to buy property sooner rather than later in an effort to avoid ever-increasing costs.

Thinking about purchasing a property?

Chat with Doorsteps Finance so you can buy with confidence

Speak to a broker
Speak to a broker


What's next for Australian property? 

Last year we saw a once-in-a-generation housing boom that touched every corner of the country. Now, in 2022, we're dealing with a far more varied Australian property market. 

But, while it's clearly a multi-speed market dynamic at play, there are several factors that are likely to press down on price growth across the country in the months to come. 

The prospect of interest rate hikes remains one of the biggest factors of all, and it's looking more and more likely. 

Inflation is on the rise, and so is the cost of living. Housing affordability has reached crushing levels in many areas. If interest rates do go up at a time when people have less disposable income, that's going to restrict what buyers can offer—and as a result, prices should fall. 

Add to that a steady increase in new listings and worsening consumer sentiment, and it may not be a question of 'if' but 'how much' growth reverses. 

There are still some factors pushing in the other direction, though. The economy is strong, unemployment has fallen to historic lows, international migration is poised to ramp up, and a new round of incentives for first home buyers could mean buyer demand holds strong. 

The next 12 months do look uncertain, but what's at least clear is we won't be seeing a repeat of the staggering growth seen in the 2022 boom. Instead, it might be a far more level playing field for buyers and sellers. 

Disclaimer: Blogs are written expressly for education purposes and content is based on the opinions of the authors or as otherwise cited.  All information is current as at publication release and we  take no responsibility for any factors that may change thereafter. Doorsteps Finance Pty Ltd and Doorsteps Solutions Pty Ltd do not accept any liability or responsibility whatsoever to any error or omission or any loss or damage of any kind sustained by a person or entity arising from the use of this information.  It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances

Disclaimer: Property reports contain property estimate data and information provided by RP Data Pty Ltd trading as CoreLogic Asia Pacific ABN 57 087 759 171 (CoreLogic) and OpenAgent Pty Ltd, which is general in nature. It is not a professional property valuation or advice to be relied upon. The actual market value of the subject property may differ. We and CoreLogic do not warrant the accuracy, currency or completeness of the data and information to the full extent permitted by law, each excludes all loss or damage howsoever arising (including through negligence) in connection with the information. You rely on the property estimate at your own risk.

Disclaimer: Doorsteps Finance Pty Ltd ACN 648 541 879 (credit representative no.531036) is authorised under Doorsteps Solutions Pty Ltd ACN 654 334 246, Australian Credit Licence 537369. Any credit application made through Doorsteps Finance Pty Ltd is subject to approval, terms and conditions, fees and charges.

Frequently Asked Questions

No items found.

Recent Post

View All Market Insights
View All Market Insights