Aussie Home Prices Record First National Drop in Nearly Two Years

In promising news for homebuyers, CoreLogic’s first Home Value Index for 2025 recorded a -0.1% drop in national home prices, marking their first decrease across Australia since February 2023. [1]

A Significant Shift in National Home Prices

While some capital cities have been experiencing consistent drops in home values for several months, December marked the first time in nearly two years that national home prices declined month-over-month.

This milestone suggests a potential nationwide shift, with property values beginning to drop more significantly and the growth margins narrowing even in previously thriving cities.

What Does This Mean for Homebuyers?

Larger cities are becoming more buyer-friendly, as property prices trend downwards.

• Melbourne’s median home value is $774,093, which is below the national average price of $814,837.
• Mid-sized cities have continued to experience healthy growth, which has, until now, bolstered the national property prices, but momentum is now slowing.

Homebuyers may be looking at a gateway to homeownership, and with the cash rate expected to hopefully drop before the end of the financial year, the first half of 2025 could belong to buyers.

What Does This Mean for Investors?

The current market present challenges, and opportunities, for investors:

• Opportunities in larger cities: Melbourne, Sydney, and Canberra are entering a recovery phase, making them more affordable for investors. As these cities rebound, property prices are likely to recover, creating future capital growth potential.
• Caution in smaller markets: Affordable cities like Hobart and Darwin may offer lower entry points but could yield smaller returns on investment.

For investors concerned about short-term trends, it’s important to remember that property markets grow over the long term. Despite monthly fluctuations, annual data shows national home values increased by 4.9% in 2024.

The Bigger Picture

CoreLogic’s data for December doesn’t just present a monthly dip. Quarterly, national home values have decreased by -0.1% between October and December, a value that is identical to the month-to-month change.

Despite this, the housing market did grow 4.9% from the same time in 2023, with the median property price growing $38,000. Melbourne, Hobart, and Canberra were the only capital cities that reported an annual loss. Melbourne was flagged as a trend leader in terms of what to expect from other states, however, even by most projections, continued to decline in value throughout the year. A contributing factor to Melbourne’s consistent decline in home value was the large volume of units in the city, which impacted overall home values.

What’s Next?

We may be transitioning from the “Boom” phase in the property cycle to the “Downturn” phase; characterised by high supply and low demand.

for prospective buyers or investors, this market shift represents a potential opportunity. Whether you’re looking to purchase your first home or expand your investment portfolio, acting now could position you for future market conditions.

Contact your local MoneyQuest mortgage broker today to explore tailored finance solutions that fit your needs and make the most of the current property market.

[1] CoreLogic, 2025, Hedonic Home Value Index January. 1^st January 2025. viewed 7^th January 2025

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