Home values cool as consumer sentiment drops
The fall in consumer confidence around the country is affecting home values. Sydney and Melbourne are the hardest hit.
HOME values took a breather in April, led by declines in Sydney and Melbourne.
The latest Cotality Home Value Index rose just 0.3 percent in April, the slowest monthly rate since January 2025.
Sydney and Melbourne values were each down 0.6 percent over the month.
Sydney values are 1.0 percent down on their November peak, with Melbourne 2.3% below its March 2022 peak.
Brisbane, Adelaide and Darwin also saw slower growth, but off a high base.
Cotality’s research director Tim Lawless said the easing had been building since late last year.
“The housing market was losing momentum… as affordability and serviceability constraints weighed on demand,” he said.
“Now we have the additional downside pressure of higher interest rates, sentiment has fallen off a cliff, and rising inflation is set to drive the cost of debt even higher.”
Cotality also points towards geopolitical uncertainty and the oil crisis… saying they’d had a swift effect on household confidence.
“Consumer sentiment has fallen sharply, prompting a more cautious approach to high-commitment financial decisions such as property purchases,” its report stated.
Demand remains highly price-sensitive, with lower-value market segments facing the greatest competition.
Regional values grew 0.9 percent in April compared with 0.2 percent in the combined capitals.
“First-home buyer stimulus and serviceability barriers are concentrating demand below the median value,” the report added.
The housing shortage continues to support demand, with new construction constrained by higher fuel costs and a tight labour market.
“Overall, the outlook points to a further loss of momentum rather than a material correction,” it concluded.
