SYDNEY: Australian home prices started the year with solid gains nationally, though the major markets of Sydney and Melbourne showed some fatigue given stretched affordability and concerns about rising mortgage rates.
National home prices increased 0.8% in January to a record median value of A$912,465 ($643,014), bringing annual gains to 9.4%, according to figures from Cotality, formerly CoreLogic.
Within that, Sydney advanced by only 0.2% and Melbourne added 0.1%, while Perth led with a jump of 2.0%, followed by hefty gains in Adelaide and Brisbane.
Prices in Australia’s state capital cities rose 0.7% in January, while those outside the cities added 1.0%.
“The ongoing capital gains reflect persistently low inventory in the face of above average housing demand, however we are likely to see demand-side pressures gradually ease in 2026,” said Tim Lawless, Cotality’s research director.
Cotality estimated the number of homes advertised for sale was 19% below levels at the same time last year, and 25% below the five-year average.
“Affordability and serviceability constraints are likely to naturally dampen demand, but also renewed cost-of-living pressures and a strong chance that interest rates will rise,” he added.
The Reserve Bank of Australia meets on February 3 and markets are wagering it could raise interest rates by a quarter point to 3.85% in an attempt to restrain stubborn inflation. – Reuters
