Nicholas Richards

Sydney has been the most impacted, recording a monthly fall of 0.8 per cent, reinforcing its sensitivity to higher borrowing costs and shifts in confidence. Modest monthly declines were also recorded across several other higher-priced and lifestyle markets. However, most cities and regional areas either continued to grow or remained broadly stable over the month.

Despite this moderation, annual growth remains very strong. Perth and Darwin continue to lead the country, with both cities recording exceptionally strong year-on-year gains across both houses and units. Brisbane and Adelaide also remain firmly in double-digit territory, although monthly growth has softened compared with earlier in the cycle.

The unit market continues to show greater resilience than houses. While some cities have seen slight monthly declines, overall performance has been more stable. This reflects ongoing affordability pressures, as well as the impact of generous first home buyer incentives, which are continuing to support demand in this segment.

Regional markets also remain robust, with strong annual growth across most areas, underpinned by tight supply and limited new construction. As with the capitals, however, the pace of growth is easing rather than accelerating.

Buyer behaviour is shifting more noticeably. Open for inspection attendance has declined again, continuing a steady downward trend and sitting well below levels seen at the same time last year. This points to a more cautious and selective buyer pool, even as transactions continue and demand remains present.

Overall, the market is not weakening in a broad sense, but clearly transitioning. Strong annual gains continue to reflect tight supply and population-driven demand, particularly in more affordable markets. However, higher borrowing costs and global uncertainty are slowing momentum, with the most interest rate-sensitive markets now leading that adjustment.

Importantly, while conditions are moderating in the short term, this is unlikely to materially improve affordability over the longer term. Construction costs remain elevated and are continuing to rise, limiting the ability to deliver new housing at scale. This will keep supply constrained and place upward pressure on prices over time, meaning affordability challenges are likely to persist even as price growth slows.

Victorian and Regional Victorian data are currently unavailable due to data issues and have been excluded from this analysis.