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While smaller markets continue to outperform, there are clear signs that growth is slowing. Monthly gains in Brisbane, Adelaide and Perth have all eased compared to recent months, and Hobart has slowed significantly. Even in the strongest markets, growth is no longer accelerating.
Regional markets show a similar pattern. Annual growth remains strong, particularly in Western Australia and Queensland, but monthly growth rates have moderated. This suggests that while demand remains, the intensity of competition is easing.
The unit market continues to show relative resilience, with stronger annual growth in several cities, particularly Perth, Brisbane and Darwin. This reflects both demand and supply factors. Buyers are increasingly considering units as house prices remain high, while new apartment supply remains limited due to construction constraints. As a result, units are not providing the level of affordability relief that might typically be expected in a slowing market.
Our data which looks at open for inspection attendance across around 12,000 properties per week has declined from earlier in the year, indicating a more cautious buyer pool. While there has been a slight improvement in recent weeks, attendance levels remain below those seen at the same time last year.
At the same time, we are seeing:
A slight slowdown in properties sold
A gradual increase in listings
This combination is shifting market dynamics. Buyers have more choice, and urgency is easing, particularly in higher-priced markets.
Global uncertainty is also playing a role. Ongoing conflict in the Middle East continues to weigh on consumer sentiment, although confidence has lifted slightly in recent weeks.
The Reserve Bank meets next week, with a further rate increase the most likely outcome. Higher rates will continue to reduce borrowing capacity and weigh on demand, particularly in Sydney and Melbourne which tend to be more sensitive to rates decisions.
At the same time, the Federal Budget on 12 May is adding another layer of uncertainty. Potential changes to capital gains tax and negative gearing are being closely watched by investors. Even the possibility of policy change can influence behaviour. Investors may delay purchasing decisions, while some may look to exit the market, contributing to the recent increase in listings.
While price growth is slowing, this does not mean affordability is improving. The key issue remains supply, particularly the rising cost of construction. Labour shortages persist, and supply chain pressures are re-emerging, driven in part by higher fuel costs linked to global conflict. These factors are increasing the cost of delivering new housing and limiting the feasibility of new developments.
This creates a structural constraint on supply that is unlikely to be resolved in the near term. Even as demand softens, the lack of new housing will continue to place upward pressure on prices over time.
The housing market is entering a slower phase, with weaker demand, more listings and declining prices in some markets. However, this is not a broad-based downturn. Strong population growth, limited supply and rising construction costs continue to underpin the market.
Further interest rate increases and policy uncertainty are likely to extend the current slowdown, particularly in more expensive markets. Smaller markets are also expected to ease, although they are likely to remain in positive territory in the near term.
Importantly, slower price growth does not resolve the underlying challenges facing the housing market. Without a meaningful increase in supply, affordability pressures are likely to persist - and may even worsen over time.
