Perth and mid-sized cities continue to rise; Sydney and Melbourne edge lower
Cotality’s national home value index increased by 0.7% in March, taking Australian dwelling values 2.1% higher over the March quarter.
The national rate of growth has moderated compared with late 2025. Cotality said gains in the first three months of 2026 were slower than the 2.8% rise recorded in the December 2025 quarter, with outcomes varying more sharply by city and by price segment.
Growth remained strongest in the mid-sized capitals and in Darwin, where monthly increases were at least 1.2%. By contrast, Sydney and Melbourne continued to drift down, extending a mild decline that began late last year.
Source: Cotality
“Since the end of November 2025, Melbourne values have retreated by -0.9% and the Sydney market is down -0.4%,” said Tim Lawless (pictured right), Cotality’s research director. “The softer trend in values coincides with falling auction clearance rates and a pickup in advertised supply, providing buyers with more choice and less urgency at the negotiation table.”
Perth moved in the opposite direction, with values rising 2.5% in March and up 7.3% over the quarter, despite higher interest rates and weaker sentiment.
“In dollar terms, the 7.3% rise in Perth home values over the quarter has added approximately $69,000 to the median dwelling value,” Lawless said. “Clearly, this pace of growth is unsustainable, but continues to be supported by low supply, with advertised stock levels tracking about 40% below the five-year average for this time of the year.”
Cotality also reported a widening gap between cheaper and more expensive parts of the market. Lower-quartile housing led gains across most capitals, with Hobart and Canberra the exceptions. In Sydney, upper-quartile values fell 1.8% over the quarter, while lower-quartile values rose by the same margin.
“Strength across the lower quartile value tier is tied to increased competition for lower priced housing,” Lawless said. “Serviceability constraints are deflecting buyer demand towards the lower end of the market, competing with a pickup in first home buyers taking advantage of stimulus and elevated levels of investor activity.”
Outside the capitals, conditions were steadier. Regional values rose 1.1% in March and 3.3% over the quarter, outpacing the combined capitals, which recorded a 0.6% monthly rise and a 1.8% quarterly increase. Regional Western Australia was the standout, with values up 2.2% in March and 6.2% over the quarter.
WA’s Bunbury is leading the pace of gains, with values jumping 8.4% through the March quarter to be 22.2% higher over the past 12 months.
Cotality flagged early indications that purchasing demand is easing. It estimated quarterly home sales were 1.9% lower than a year earlier and 5.6% below the five-year average. The group said further pressure from living costs and interest rates, along with weaker confidence as conflict in the Middle East continues, could weigh on demand and contribute to slower growth in dwelling values in coming months.
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