Sydney home prices flatline while rest of Australia stays strong
Money markets and many economists expect the RBA will raise rates again in May to 4.1%
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[SYDNEY] Sydney home prices, Australia’s bellwether property market, stagnated in February even as other major cities kept powering ahead, irrespective of the Reserve Bank of Australia’s (RBA) interest-rate hike earlier in the month.
Both Sydney and Melbourne recorded flat results, while Perth, state capital of mining powerhouse Western Australia, surged 2.3 per cent and the northeastern city of Brisbane advanced 1.6 per cent, property consultancy Cotality said in its Home Value Index released on Monday (Mar 2). Australia’s major cities rose by a combined 0.6 per cent, easing from 0.7 per cent posted in the first month of the year.
“The clear slowdown in housing conditions across Sydney and Melbourne could signal an easing in growth conditions elsewhere down the track,” said Tim Lawless, Cotality’s research director. “But for now, the mid-sized capitals continue to see support from extremely low inventory levels, which is boosting the growth in values.”
Sydney is typically a harbinger for the broader market and its flat reading comes after the RBA in February became the first major central bank to increase borrowing costs this year. It’s trying to damp resurgent inflation, with some of those price pressures fuelled by housing, particularly rents where low vacancy rates and elevated demand have spurred gains.
The national Rental Value Index rose another 0.7 per cent in February, extending its accelerating trend since October 2025, Cotality said.
As to the outlook for property prices, Cotality sees some support remaining, though headwinds have increased, particularly around affordability, with Sydney prices up more than 30 per cent in the past five years and Brisbane’s over 85 per cent in the period.
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Money markets and many economists expect the RBA will raise rates again in May to 4.1 per cent, which will further stretch borrowers trying to finance a purchase. At the same time, Cotality highlighted that housing supply is still constrained and unemployment remains low, helping support the market.
“Overall, housing market conditions in early 2026 appear finely balanced,” Cotality said. “Price growth is expected to be most evident at the lower end of the market, where competition among buyers is concentrated and policy support is most effective.” That policy support includes the Labor government’s 5 per cent deposit guarantee that aims to assist first home buyers. BLOOMBERG
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