House values in two biggest cities ease as population growth slows
Sydney and Melbourne home values fell for a second consecutive month as high prices and inflation drove potential buyers out of the market and population growth in the country’s two largest cities slowed to its lowest rate since the depths of the pandemic.
Figures released by Cotality on Wednesday show home values in Sydney fell 0.3 per cent in March. In Melbourne, there was a decrease of 0.6 percent. Since the start of the year, house values have fallen by 0.6 per cent in Sydney and 0.9 per cent in Melbourne.
Annual price growth in the country’s two largest property markets fell to 5.3 percent in Sydney and 4 percent in Melbourne.
Cotality research director Tim Lawless said a number of factors were at play in the two cities, including a rise in prices in recent months, which had made homes unaffordable for a growing number of potential buyers.
“The soft trend in values coincides with falling auction clearance rates and an increase in advertised supply, giving buyers more choice and less urgency at the negotiating table,” he said.
The situation is different in other capitals of the country. House values in Perth rose by 2.5 per cent last month, increasing by 24.1 per cent in the last 12 months. The average house value in Western Australia’s capital city is currently $1.06 million.
House values in Brisbane increased by 1.7 per cent, making them 18.5 per cent higher than a year ago, while Adelaide’s median value rose 1.2 per cent to settle at just under $1 million.
Lawless said there were signs that demand for properties was waning. Sales in the last three months decreased compared to the same period last year and were 5.6 percent below the five-year average.
He said that given the expectation of high inflation and the increase in interest rates due to the war against Iran, demand from potential buyers will likely decrease further, which will slow down the growth in home values.
Some of this slowdown may be due to a decline in population growth in the country’s largest cities.
Data from the Australian Bureau of Statistics shows Melbourne added 105,030 residents in 2024-25, down 37,607 from 2023-24 and more than a third off the record 167,500 that occurred in 2022-23.
The largest of all cities, Melbourne’s growth was driven by overseas migration (81,000) while natural population growth added another 32,416 people. More than 8,550 people left Melbourne for other parts of the country.
Outside of the pandemic, this was the smallest increase in Melbourne’s population in almost 15 years.
Sydney added 75,230 residents last financial year; That’s a drop of 32,000 from 2023-24 and almost half of what was recorded in 2022-23.
Since the start of the decade, Melbourne has added 366,000 people; this is the highest figure of any capital city. But the biggest increase in percentage terms was in Perth, which increased by 335,000 people to over 2.4 million.
Perth added more people than Brisbane (279,000) or Sydney (326,000) in the last five years. 58,000 people added in the last 12 months; This is about the same as Brisbane, which is now home to 2.8 million people.
The fastest growing region in the country was the Port Melbourne region, where the population increased by 22.6 percent, meaning more than 3,400 people live. Outer Melbourne suburbs such as Plumpton (19.7%) and northern Tarneit (18.5%) are also growing rapidly.
Sydney’s fastest growing area is the Box Hill-Nelson area, which added 26,348 people last year.
The numbers confirm that most Australians want to live in our big cities. The Australian Territory added 94,700 residents during the year, up 1.1 percent to 8.9 million.
The country’s capital cities were home to 18.8 million people, up 324,700 or 1.8 percent. Sixty-eight percent of Australians now live in eight capital cities.
Regional population growth, which increased rapidly in the first year of the pandemic, has slowed every year since 2021.
More than 70 municipal areas lost residents last year. The population of 27 councils in NSW has declined. Almost all of these were in regional areas such as Broken Hill, Bourke, Parkes and Cootamundra.
Only one council area in Sydney, Hunters Hill, has had residents killed. Its population decreased by 64 people to 13,983. Hunters Hill has lost almost 760 people in the last decade; This accounts for more than 5 percent of the population.
The largest decline in population occurred in Trayning, Western Australia’s small wheat-sheep belt council. The council’s population fell to 304, with its population decreasing by 1.6 percent. Trayning’s population has decreased by 25 percent in the last 20 years.
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Shane Wright is senior economic correspondent for The Age and The Sydney Morning Herald.Connect with: X or email.
