Australia’s housing market moved into a quieter phase in May, with national dwelling values unchanged for the month. The flat result masks very different conditions across the country. Some markets are still rising, but the overall pace has slowed as affordability, borrowing limits, and household budget pressure weigh more heavily on demand.
National dwelling values were still 8.8 per cent higher over the year, with a median value of $941,864. However, the combined capitals slipped 0.1 percent in May, while combined regional markets rose 0.6 per cent. Over the quarter, capital city values were flat, compared with a 2.4 per cent rise across the regions.
Sydney and Melbourne are now leading the softer side of the cycle. Sydney values fell 0.9 per cent in May and Melbourne values fell 0.8 per cent. Both are now below recent peaks, with Sydney down 2.1 per cent from November and Melbourne down 3.2 per cent from its March 2022 high. Canberra also eased, down 0.2 per cent for the month.
Perth, Darwin, Brisbane, Adelaide and Hobart are slowing.
Other capitals remain positive, although momentum is easing. Perth and Darwin recorded the strongest monthly gains, both up 1.5 per cent. Brisbane and Hobart rose 0.9 per cent, while Adelaide increased 0.5 per cent. Perth remains the standout over the year, up 25.8 per cent, followed by Darwin at 20.3 per cent and Brisbane at 19.1 per cent.
Regional markets continue to show more resilience, but they are not immune to the slowdown. Regional WA led the monthly gains at 1.9 percent, while regional NSW recorded the smallest rise at 0.2 per cent. Across all regional markets, the May increase was the slowest in a year.
The softer tone is also showing in activity. Estimated national sales over the past three months were 2.2 per cent lower than a year earlier and 4.1 percent below the five-year average. Sydney and Melbourne recorded the sharpest falls in sales, while listings have risen above average in those cities, giving buyers more choice and stronger negotiating power.
Pricing sensitivity up
For homeowners considering selling, the message is to price carefully and prepare well. In slower markets, buyers are less likely to chase properties that sit above market expectations. Presentation, timing and local advice matter.
For owners holding or renovating, the data supports a measured approach. Growth has not disappeared, but it is becoming more uneven. Improvements should be guided by long-term liveability and likely buyer appeal, not short-term price expectations.
For first home buyers, affordability remains difficult, but softer conditions in some markets may provide more breathing room. Higher listings and slower sales can create more time to compare options, negotiate and avoid rushed decisions. The trade-off is that borrowing capacity remains constrained while interest rates, inflation and living costs continue to shape what buyers can safely afford.
‘The Great Pause’
Agents are describing the post-Budget environment as ‘The Great Pause’.Two weeks on from the Budget’s tax shake-up. First home buyers, investors and vendors are taking stock and waiting for clarity. That is a considered response to a significant policy shift, and history tells us that markets that pause with purpose tend to move with conviction when the picture clears.
Monthly change in capital city home values
| MONTHLY | ANNUAL | |
| Sydney | ↓ 0.9% | ↑ 2.3% |
| Melbourne | ↓ 0.8% | ↑ 0.5% |
| Brisbane | ↑ 0.9% | ↑ 19.1% |
| Adelaide | ↑ 1.5% | ↑ 12.3% |
| Perth | ↑ 1.5% | ↑ 25.8% |
| Hobart | ↑ 0.9% | ↑ 9.3% |
| Darwin | ↑ 1.5% | ↑ 20.3% |
| Canberra | ↓ 0.2% | ↑ 4.3% |
| National | ↑ 0.0% | ↑ 8.8% |
DISCLAIMER
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions. Click here for full Terms of Use.