December Market Smart: A Rare Decline
Key Takeaways
- December marked the first monthly decline in the CoreLogic Home Value Index (HVI) in nearly two years, with a slight national drop of -0.1%.
- Growth slowed significantly in the second half of 2024, with only 0.7% growth compared to 4.1% in the first half.
- While cities like Melbourne (-3.0%), Hobart (-0.6%), and Canberra (-0.4%) recorded annual declines, mid-sized capitals such as Perth (+19.1%), Adelaide (+13.1%), and Brisbane (+11.2%) saw double-digit growth.
- Regional markets grew by 6.0% over the year, outpacing the combined capital growth of 4.5%.
- Lower-priced properties outperformed higher-priced segments, with lower quartile capital city values rising by 9.8% compared to just 1.5% for the upper quartile.
- Rental growth slowed, with the annual rental index rising by just 4.8%, the lowest since 2021.
(CoreLogic, 2025)
Current Market Trends
The Australian property market closed 2024 with a notable shift, marking the first national decline in housing values in nearly two years. December’s -0.1% drop in CoreLogic’s Home Value Index (HVI) reflects the culmination of affordability constraints, increased stock levels, and shifting buyer sentiment. This decline, while modest, signals a broader trend of cooling momentum following an extended period of robust growth. The quarterly results mirrored this slowdown, with national values also slipping by -0.1%, reflecting the weight of stretched household budgets and reduced borrowing power amidst persistently high interest rates.
Capital city performance was notably divergent, with Melbourne (-3.0%), Hobart (-0.6%), and Canberra (-0.4%) experiencing annual declines, while mid-sized capitals continued to outperform. Perth (+19.1%), Adelaide (+13.1%), and Brisbane (+11.2%) recorded strong annual gains, albeit at a slower pace compared to their peak growth periods earlier in the year. The slowdown in Perth, for example, reflects a slight increase in advertised stock levels, which has softened buyer urgency despite overall demand remaining resilient. In contrast, Adelaide maintained its strong growth trajectory, bolstered by historically low stock levels, with advertised listings tracking -34% below the five-year average.
(CoreLogic, 2025)
The affordability squeeze was most evident in higher-priced market segments, with the upper quartile of capital city values growing by just 1.5% over the year, significantly trailing the 9.8% growth recorded in the lower quartile. This trend
underscores the shift in buyer demand towards more affordable properties as rising mortgage rates and cost-of-living pressures limit purchasing power. First-home buyers and investors have increasingly gravitated towards lower-priced homes, sustaining demand in these segments even as overall market momentum eased.
In regional markets, growth outpaced capital cities, with values rising 6.0% over the year compared to 4.5% across combined capitals. Markets in Regional Western Australia (+16.1%), Regional South Australia (+12.5%), and Regional
Queensland (+10.5%) emerged as top performers, driven by affordability, lifestyle preferences, and continued interstate migration. However, regional Victoria and the Northern Territory bucked this trend, with annual declines of -2.7% and -4.7% respectively.
(CoreLogic, 2025)
Rental market trends further highlight the changing dynamics of housing demand. National rental growth slowed to 4.8% annually, marking the smallest rise since 2021. December’s rental index saw only a 0.1% monthly increase, indicating a significant deceleration compared to earlier in the year. This moderation can be partly attributed to stabilising migration trends, larger household formations, and increased investor participation in the rental market. Nonetheless, rental affordability remains a significant challenge, with median rent consuming roughly one-third of median household income.
Looking ahead, market conditions remain finely balanced. Persistently high interest rates, subdued consumer confidence, and ongoing affordability pressures are likely to maintain downward pressure on housing values in 2025. However, tight supply levels, population growth, and ongoing migration are expected to provide some level of support, particularly in mid-sized capital cities and select regional markets. Investors and homebuyers will need to navigate these competing forces carefully, with a strong emphasis on localised market trends and affordability dynamics
shaping outcomes in the months ahead.
