‘Bellwether’ markets show where house prices are picking up
The Australian property market is again in the spotlight as house prices fluctuate across the country, writes Emily Rayner.
According to the latest data from CoreLogic’s March 2025 Housing Chart Pack, national house prices dipped by -0.1 per cent over the rolling quarter.
Within that, capital city markets fell -0.4 per cent while regional markets remained resilient, recording a 1.0 per cent increase.
However, within the broader market, a key segment is showing early signs of recovery after a relatively short-lived downturn – high-end properties.
The upper quartile of capital city home values rose 0.2 per cent in February, reversing a -0.3 per cent decline from January.
This segment is historically considered an indicator for wider market trends, suggesting potential momentum in the months ahead.
CoreLogic economist Kaytlin Ezzy noted “the top quartile is the one to watch as they tend to be a bellwether for broader market recoveries”.
If this upward trend continues, the upper quartile could outperform other segments for the first time since August 2023.
What’s driving these changes?
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Several factors are influencing the current movement in house prices, including the drop in mortgage rates following the Reserve Bank of Australia’s recent cut to the official cash rate.
This has provided some financial relief, leading to increased borrowing capacity and improved buyer sentiment.
Market sentiment has also improved, with a surge in buyer confidence. This appears to have contributed to the February rebound, particularly in high-end markets, where finance availability is crucial.
While the market responded strongly to the February RBA’s rate cut, the trend was already strengthening as expectations for a cut grew before the decision.
“This suggests sentiment was also at play,” Ezzy said.
“If buyers are out in the market expecting they can access more finance, this may have contributed to a strong market response.”
Differing market conditions meant Sydney, Melbourne and Hobart have experienced some of the sharpest downturns in recent years, but are now showing early signs of recovery.
House prices are also recovering in Hobart, up 0.4 per cent in February. Photo: AAP
Key market insights: Capital cities lead turnaround
Sydney’s high-end eastern Suburbs – the north region, including Point Piper, Double Bay and Rose Bay, surged by 2 per cent month-on-month in February, reversing a -0.5 per cent fall in January.
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Hornsby followed with a 1.1 per cent rise in values, marking a strong turnaround.
However, auction clearance rates in early March showed a slight decline, hinting at continued uncertainty.
In Melbourne, the Stonnington East region – which includes the well-heeled suburbs of Prahran, South Yarra and Toorak – posted the largest capital growth improvement, moving from a -1.9 per cent decline in January to a 0.8 per cent gain in February.
Other pricier locations such as Manningham East, Bayside, and Glen Eira also had notable price rebounds.
Hobart’s North East region, with a median home value of $709,000, led growth in Tasmanian capital.
Hobart and Melbourne had the largest monthly capital gains at 0.4 per cent.
What this means for buyers and sellers
While some segments remain soft for buyers, high-end properties are already responding to interest rate cuts. Buyers should be aware that if this momentum continues, prices may rise in coming months.
For sellers, the market is showing signs of stabilising, particularly at the upper end. If confidence continues to improve, sellers may regain stronger negotiating power.
Market outlook: Is recovery on the horizon?
While national house prices declined slightly over the rolling quarter, the latest data suggests an improving sentiment, especially in high-end markets.
However, challenges remain.
Properties are taking longer to sell, with the median time on market rising to 42 days, up from 27 days in the third quarter of 2024.
Additionally, vendor discounting has widened slightly, reflecting ongoing price negotiations between buyers and sellers.
Australia’s housing market remains diverse, with different regions and price segments responding uniquely to economic shifts.
While some areas are still experiencing price declines, signs of recovery in high-end markets suggest that a broader market turnaround could be on the horizon.
This article first appeared on View.com.au. Read the original here.
