House prices fall in major cities, as property market cools signalling the end of almost two years of growth

Almost two years of national home price growth could soon end as mid-sized capitals and mining regions struggle to overcome declines in major cities.

Property data firm CoreLogic recorded a 0.1 per cent rise in November despite downturns gathering momentum in Sydney and Melbourne.

“The mid-sized capitals and most of the regional ‘rest of state’ markets continue to provide some support for growth in the national index, but it is clear momentum is also leaving these markets,” CoreLogic research director Tim Lawless said on Monday.

While the average home owner has lapped up almost 40 per cent of growth since March 2020, helped by an ongoing streak of 22 monthly rises, 2025 appears to be shaping as a buyer’s market.

The weakening housing trend was expected to continue until interest rates were cut, CoreLogic said.

Forecasts for that cut slid out towards mid-2025 after core inflation in October remained above the Reserve Bank’s target range.

“A lower cash rate will be a positive factor for housing markets,” Mr Lawless said.

“A couple of rate cuts might be enough to shore up a declining trend in home values, but it is hard to see any material upward pressure returning until interest rates reduce more substantially and affordability barriers are less formidable.”

Selling conditions deteriorated through the traditionally busy spring season with more available supply and less purchasing activity.

Fewer than three in five auctions across capital cities in resulting in a sale, while private treaty sales are taking longer.

Purchasing activity has fallen sharpest in Sydney, where values contracted 0.2 per cent in November and 0.5 per cent over the quarter.

That’s half the speed of Melbourne’s falls while small monthly rises in Canberra and Darwin could not erase quarterly falls there too.

Pacesetters Perth and Adelaide are also slowing, with quarterly rises of 3.0 per cent and 2.8 per cent respectively the worst in about 18 months.

Mining regions in WA and Queensland have led the charge in the regions, with property values in Mackay, Geraldton and Townsville up at least 6.6 per cent over the quarter.

Meanwhile, national rents are weakening under the weight of lower population growth, particularly less net overseas migration, and a gradual recovery of average household size.

Rents rose 0.2 per cent in November to be up 5.3 per cent over the past year.

While twice that of the 2010s average, the annual rise is nearly half those in the previous two years.

“Beyond any seasonality, it looks increasingly like the rental boom is over,” Mr Lawless said.

“A record low in rental affordability is probably a central reason for the rebound in household size, with high rents likely to be forcing a restructuring of households as renters look for ways to minimise their housing costs,” Mr Lawless said.

Tax changes that passed federal parliament last week are also expected to increase the rental stock by up to 80,000 build-to-rent properties over a decade.

Record low rental vacancies have also propelled several state governments to strike a fairer balance between renters and landlords.

Soon-to-be enacted reforms in NSW ban no-grounds evictions, ban background check fees and limit rent increases to once a year.

Proposed changes in Victoria would allow tenants to challenge a rent hike based on its size alone.

That’s after skyrocketing complaints to Consumer Affairs Victoria and the agency deeming about 1500 rent rises “excessive” under current laws.