Lift in home values may hint at a recovering housing market

Interest rates may be a dampener, but new data shows other factors are now placing upwards pressure on home prices

Residz Team 3 min read



For the first time since April 2022, Australia’s home values have lifted slightly. CoreLogic’s national Home Value Index (HVI) posted the first month-on-month rise (0.6%) in March.

Announcing the rise, CoreLogic said dwelling values were led by a 1.4% gain in Sydney. House values within the most expensive quarter of Sydney’s market were up 2.0% in March and the upper quartile of the Sydney unit market was 1.4% higher over the month.


CoreLogic’s Research Director, Tim Lawless, put the rise down to a combination of low advertised stock levels, extremely tight rental conditions and additional demand from overseas migration.

“Although interest rates are high and there is an expectation the economy will slow through the year, it’s clear other factors are now placing upwards pressure on home prices,” Mr Lawless said.

Number of dwellings for sale is below average

Tim Lawless says advertised supply has been below average since September last year, with capital city listing numbers ending March almost -20% below the previous five-year average.  

“Purchasing activity has also fallen but not as much as available supply; capital city sales activity was estimated to be roughly -7% below the previous five-year average through the March quarter.”

Tight rental markets and overseas migration at record levels

Tim added that with rental markets tight, it’s likely we are seeing some spillover from renting into purchasing, although, with mortgage rates so high, not everyone who wants to buy will be able to qualify for a loan.  

“Similarly, with net overseas migration at record levels and rising, there is a chance more permanent or long-term migrants, who can afford to, will skip the rental phase and fast track a home purchase simply because they can’t find rental accommodation.”

Rural areas seeing strong increases

CoreLogic’s research shows that SA’s Fleurieu-Kangaroo Island SA3 sub-region led capital gains over the month with a 2.6% rise in dwelling values followed by Dubbo in NSW (2.5%), Wellington in Victoria (2.4%) and MidWest in WA (2.1%).

“The best performing regional markets are quite different to what we were seeing through the recent growth cycle,” Mr Lawless said.

“In today’s market it is mainly rural areas that are seeing the strongest increases, rather than the commutable coastal and lifestyle markets that were booming through the upswing.  However, we are seeing some subtle growth return to regions within commuting distance of the major capitals, after many recorded a sharp drop in values.”

Some areas see housing values drop

CoreLogic says Hobart recorded the largest drop in home values among the capital cities, down -0.9% over the month.  

Housing values in Hobart have fallen -12.9% since peaking in May last year; overtaking Sydney as the largest cumulative fall from peak across the capital cities.  However, it says the pace of decline has been easing across Hobart over the past three months.

Canberra (-0.5%), Darwin (-0.4%) and Adelaide (-0.1%) also recorded a decline in values over the month, as did Regional Victoria (-0.1%) and Regional Tasmania (-0.7%).


So, does the first rise in home values in 10 months point to a recovering housing market? Home buyers and sellers will be watching closely to see if the real estate market conditions are improving or weakening.

As always, buying or selling a house successfully depends on location and requires significant research.

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Source: “CoreLogic Home Value Index: National home values up 0.6% in March, breaking a 10-month streak of falls”, 3 April 2023, CoreLogic Research News

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