Property prices positioned to increase

According to CoreLogic, property trends are often determined off the back of how the high-end property market performs.

With these high-end markets seeing some momentum over the month of February, the experts believe this is an early sign of an increase in prices across the country.

Across the capitals, the top 25 per cent priced properties saw a 0.2 per cent increase in values throughout the month. This was off the back of a 0.3 per cent drop the month prior.

“The upper 25 per cent 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,” CoreLogic economist Kaytlin Ezzy said.

“The top quartile is the one to watch as they tend to be a bellwether for broader market recoveries in those cities. 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.”

As highlighted by Ezzy, the growth can be attributed to rate cuts, which is interesting considering it didn’t happen until 18 February.

“In Sydney and Melbourne, but also Hobart, many of the markets with a solid response to rate reductions are also seeing values well below their peak under recent interest rate rises, so easier access to credit may trigger a recovery trend in these markets.

“It is possible that these kinds of markets have a stronger response to cash rate falls because people generally need more finance to buy into them. However, the RBA Board minutes and statement in February were fairly hawkish despite the rate cut, so there is some uncertainty as to whether the recent momentum will continue,” she said.

If these cyclical trends are anything to go by, home owners can expect the value of their property to see some recovery in the coming year.

For prospective home owners, the recent relief of subdued growth may be coming to an end.

Currently, CoreLogic said properties are taking longer to sell, with the national median time on the market rising from a recent low of 27 days in Q3 2024 to 42 days over the three months to February.

Currently, residential real estate across Australia is valued at $11.2 trillion, while commercial is $1.3 trillion.

There are around 11.3 million total dwellings and the outstanding mortgage debt is a combined $2.4 trillion. Over the last 12 months, there have been 532,244 sales, with a total value of $506.5 billion.