Australia's median dwelling value rose 0.4% in March to a new record high of $820,331, according to CoreLogic's latest Home Value Index. 

It marks the second consecutive monthly rise after a brief softening in late 2024 and comes amid the RBA's first rate cut in more than three years.

"Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values, along with the cut's direct influence on borrowing capacity and mortgage serviceability," said CoreLogic research director Tim Lawless.

The February rate cut saw the cash rate lowered by 25 basis points to 4.10%, a move welcomed by mortgage holders.

While most economists still expect the central bank to hold the cash rate steady in April, the housing market appears to have already responded to the looser monetary stance.

February cut fuels buyer sentiment

Among the housing markets driving the uptick were those of the nation's largest cities – Sydney (up 0.3%) and Melbourne (up 0.5%).

Adelaide saw the largest gains, with the average property price rising 0.8% in the South Australian capital last month.

Meanwhile, median dwelling values in Brisbane threatened to tip over $900,000, coming in at $899,824 as of the end of March (up 0.4% month-on-month).

Hobart was the only capital in which dwelling prices fell, dipping 0.4%, while those in Canberra nudged up by 0.2%.

Monthly Change Annual Change Median Value
Sydney +0.3% +0.9% $1,190,616
Melbourne +0.5% -2.6% $781,318
Brisbane +0.4% +8.6% $899,824
Adelaide +0.8% +11% $827,675
Perth +0.2% +11.9% $806,205
Hobart -0.4% -0.2% $657,059
Darwin +1.0% +2.6% $519,287
Canberra +0.2% -0.5% $854,398
Combined capitals +0.4% +2.8% $900,629
Combined regional +0.5% +5.3% $666,830
National +0.4% +3.4% $820,331

Figures from CoreLogic's Home Value Index as at 31 March 2025. CoreLogic is set to rebrand as Cotality in the near future.

What's next for house prices?

Despite the positive momentum, there are concerns the steep prices revealed recently could limit further upside.

"With the rate-cutting cycle expected to be drawn out, it will be interesting to see if this positive inflection in values can last in the face of affordability constraints," Mr Lawless said.

That might be particularly the case in Sydney and Melbourne, where median houses now trade for around $1.47 million and $930,000, respectively.

Previous research by CoreLogic showed higher-priced markets, particularly those for houses in Sydney and Melbourne, have historically responded more to cash rate cuts.

Generally, national dwelling values have previously lifted an estimated 6.1% for each percentage point wiped from the cash rate.

Beyond interest rates, several other forces could shape the housing market's trajectory in 2025.

A normalisation of population growth and limiting housing credit policies could act as headwinds.

However, factors like ongoing cost-of-living relief, a resilient jobs market, and possible further rate cuts later this year may provide support.

Economists at Westpac, CBA and NAB have flagged May as the most likely month for a second RBA rate cut, depending on the outcome of the March quarter CPI due in late April.

Image by Austin Kehmeier on Unsplash

Collections: