After several years of rapid price growth and subsequent cooling, Australia’s housing market is showing signs of stabilisation. Data from the latest CoreLogic report indicates that house prices in major cities such as Sydney, Melbourne, and Brisbane have begun to level out, with only marginal increases recorded over the past three months. While affordability remains a pressing concern for many Australians, the moderation in price growth suggests that the market may be entering a more sustainable phase.
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One of the driving factors behind the slowdown has been a series of interest rate increases by the Reserve Bank of Australia (RBA). The central bank raised rates throughout 2022 and 2023 in an effort to curb inflation, and these moves have had a direct impact on mortgage repayments. For many buyers, higher borrowing costs have reduced the size of loans they can secure, cooling demand and putting downward pressure on prices. Although inflation has eased slightly in recent months, the RBA has indicated it will maintain a cautious approach.
Despite these conditions, demand remains strong in certain segments of the market, particularly for well-located properties close to public transport, schools, and employment hubs. First-home buyers, while facing affordability challenges, continue to look for entry-level properties, supported by government assistance programs such as stamp duty concessions and grants. Meanwhile, investors are re-entering the market in some cities, drawn by rental shortages and rising rental yields. This has created a competitive environment in specific suburbs, even as overall price growth slows.
