Australian dwelling values rose another 0.5% in May, taking the national index 1.7% higher over the first five months of the year.  Capital gains were recorded across all capital cities, led by Darwin at 1.6%, with all others posting a monthly rise of at least 0.4%.  The May update marks the fourth consecutive month of growth, following a short and shallow decline of 0.4% over the three months ending January 2025.

The continued momentum we’re seeing across almost all markets is no doubt being fuelled by rate cuts and a widespread expectation that rates will fall further through the year. With the most recent cut in May, we are likely to see a positive influence flow through to housing values in June and the remainder of the year.

The week after May’s interest rate cut saw the capital city auction clearance rate rise to 65.1%, the highest since July last year.

Despite some monthly momentum forming, the pace of annual growth in the national Home Value Index slowed to 3.3%, the weakest twelve-month change since the year ending August 2023. This slower annual pace of growth reflects the easing in capital gains through the second half of last year, culminating in the modest fall in values over the three months to January.

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ACT