According to the latest Cotality data, national home values have recorded modest growth in recent months, signalling that price momentum is easing after a strong run. Growth has been strongest in smaller capitals — Perth led recent gains with a sharp monthly lift, while Sydney and Melbourne recorded much slower increases amid affordability constraints. From a buyer’s agent perspective, this points to a diverging market: mid-sized cities continue to drive growth, while major capitals are showing signs of price fatigue. Auction clearance rates in Sydney and Melbourne have slipped into the low-60% range, indicating softer buyer demand.
Opportunities in Mid-Sized Capitals
Buyers can still find great opportunities outside the big cities. Perth’s market is exceptionally tight – available listings are about 40% below average, which is why Perth prices jumped so sharply. Other medium-sized capitals (Brisbane, Adelaide, Canberra) are also outperforming the major markets. Buyers can never forget to keep these things in mind:
- Look at entry-level segments: Across most capital cities, the lower-priced end of the market is heating up. In recent months, the cheapest quartile of homes has seen the strongest price growth. That means well-priced, lower-cost homes can be good entry points for first-home buyers or investors.
- Be cautious in Sydney/Melbourne: Affordability is squeezing these markets. Sydney has only a small supply shortfall (listings ~2.2% below normal), so buyers may see slower gains until cheaper homes come online. Melbourne is similar.
Despite the slower growth, competition remains fierce in most areas. Low inventory and steady demand mean buyers still need a smart approach.
Affordability and Financing Challenges
Housing is very expensive by historical standards. Cotality’s data show the median dwelling now costs about 8.2 times the annual household income. The average home loan now needs roughly 45% of income to service. With inflation up and interest rates unlikely to fall soon, many borrowers will struggle with serviceability. In this environment, finance readiness is crucial: get pre-approval before you hunt for a property, and calculate loan repayments carefully.
Buyer Strategies in the Current Market
Given the supply–demand mismatch, buyers should focus on strategy and preparation:
- Shop in emerging markets: Look beyond the usual hotspots. Mid-sized capitals (especially those with low listings) offer stronger demand signals and potentially better value.
- Consider long-term fundamentals: While Sydney/Melbourne may slow, don’t overlook longer-term prospects (jobs, infrastructure, rental demand) that can support prices. Perth’s outlook remains bright thanks to a big supply crunch.
- Use expert advice: A buyer’s agent can help identify off-market opportunities, value cases, or up-and-coming suburbs. We can also prepare clients for tougher serviceability tests and new lending rules.
At Investmate, we believe the right strategy changes with market conditions. If you are also ready to make your move book a free consultation or contact us at +61 421 942 049 today. Also, follow us on Instagram and LinkedIn for more market insights and property tips.