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Capital city growth rates tighten to narrowest range since March 2021

After moving through the most diverse conditions since 2007, growth rates across Australia’s capital cities have tightened to the narrowest range in over 4 years, according to Cotality’s Housing Chart Pack.

The June ‘Chart of the Month’ highlights how annual dwelling value growth is converging across the capital cities amid changing market conditions.

In May, the difference between the highest and lowest annual growth rates was just 9.8 percentage points, the narrowest gap since March 2021.

It was only August last year, the gap between the highest and lowest performing capitals was at its widest since 2007 (during the height of the mining boom and just prior to the Global Financial Crisis), with a range of 26.1 percentage points.

Cotality Research Director Tim Lawless noted this convergence has occurred rapidly and signals a changing dynamic in Australia’s housing market.

“The convergence of growth rates is attributable to the pace of capital gains slowing across the mid-sized capitals while previously soft markets like Melbourne, ACT and Hobart move back into a positive growth position.”

“Growth across Perth, Adelaide and Brisbane have slowed amid worsening affordability constraints, reduced interstate migration, and a drop in investment demand.

Although despite the slowdown, Perth and Adelaide continue to post the strongest annual gains at 8.6%, though well below their cyclical peaks of over 25%,” he said.

Conversely, Mr Lawless said softer markets are showing signs of recovery, supported by falling interest rates and housing becoming more affordable as prices have reduced.

“For Sydney, home values have bounced back from a 12.4% decline in early 2023 to positive growth by July 2023, peaking at 12.3% annual growth in January 2024, but since then, growth has slowed to its lowest rate (1.1%) since June 2023.

“Melbourne’s annual rate of decline has eased from -7.8% in January 2023 to -1.2% over the past year, with values steadily increasing since February.

“Hobart’s rate of decline has turned positive, with values up 1.0% over the past 12 months following a peak rate of annual decline of -11.8% in March 2023.”

“For now, capital city housing markets are moving more in step than they have in years,” Mr Lawless concluded.

Other highlights from the June Housing Chart Pack include:

• Cotality estimates the combined value of residential real estate rose to $11.4 trillion at the end of May.
• The rolling quarterly trend for national dwelling values came in at 1.3% over the three months to May, in line with the revised 1.3% rise seen over the three months to April.
• The 3.3% in the year to May shows a continuation of easing and is the the lowest annual increase since the 12 months to August 2023.
• Across the capitals, Darwin continued to lead the pace of quarterly growth, with dwelling values up 4.3% over the three months to May. Followed by Perth and Brisbane tied for second, with values increasing 1.6%.
• The annual change in housing values has continued to favour regional Australia, with regional WA (+12.5%) and regional SA (+12.4%) leading the pace of annual gains.
• Cotality estimates 43,903 sales occurred nationally in May, taking the rolling 12-month count to 526,530.
• The national median time on market rose to 34 days over the three months to May after briefly dipping to 30 days over the three months to April.
• The median vendor discounting rate came in at 3.4% over the three months to May, down from the recent high of 3.7% recorded in the three months to January.
• The flow of newly advertised stock rebounded in May, with 35,069 properties listed for sale nationally over the four weeks to 1 June 2025.
• Rental growth continued to moderate in May, with national dwelling rents up 0.4% over the month.
• The June ‘Chart of the Month’ shows how annual dwelling value growth across Australia’s capital cities is converging. Over the past month, the difference between the highest and lowest annual growth rates was just 9.8 percentage points, which is the narrowest gap since March 2021.

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