CoreLogic’s Housing Chart Pack for March reveals the upper quartile of capital cities, representing the top 25 per cent of home values, rose 0.2 per cent in February following a decline in January, indicating renewed momentum in this bellwether segment.
While the lower quartile still outperformed with a 0.4 per cent increase, the high-end market showed the sharpest turnaround in growth compared to previous months, particularly in Sydney, Melbourne and Hobart.
CoreLogic Economist Kaytlin Ezzy said this trend is significant for the broader market.
“The top quartile is the one to watch as they tend to be a bellwether for broader market recoveries in those cities,” Ms Ezzy said.
She said that if this momentum continues, the quarterly change in upper quartile values could turn positive and potentially outperform other market segments for the first time since August 2023.
The prestige markets in Sydney showed particularly strong performance, with the Eastern Suburbs-North market growing 2 per cent month-on-month after falling 0.5 per cent in January, marking a significant 250 basis-point turnaround.
Hornsby followed with values rising 1.1 per cent in February, posting a 200-basis-point improvement from the previous month.
In Melbourne, the biggest turnaround occurred in Stonnington East, where values shifted from a 1.9 per cent drop in January to a 0.8 per cent increase in February.
Other high-end areas like Manningham East, Bayside, and Glen Eira also demonstrated strong recoveries.
Hobart tied with Melbourne to lead monthly gains across capital cities, recording a 0.4 per cent increase.
The Hobart-North East region, which sits toward the high-end of the local market with a median value of $709,000, saw the highest capital growth turnaround in the city.
Ms Ezzy said that February’s interest rate cut played a significant role in market performance but noted that sentiment was also a factor.
“This suggests sentiment was also at play,” she said.
“If buyers are out in market expecting they can access more finance, this may have contributed to a strong market response.”
Despite these positive signs in premium markets, the broader housing landscape shows mixed signals.
The combined value of residential real estate held steady in February at $11.2 trillion, while national home values fell 0.1 per cent over the rolling quarter.
Properties are also taking longer to sell, with the national median time on market rising from 27 days in Q3 2024 to 42 days over the three months to February.
Vendor discounting rates have continued to loosen, expanding from 3.5 per cent at the end of spring to 3.6 per cent.
The rental market is also showing signs of cooling, with the annual change in national rental values slowing to 4.1 per cent over the year to February, down from an 8.3 per cent increase seen over the year to March 2024.
However, Ms Ezzy said that continued momentum in premium markets remains uncertain given the Reserve Bank’s recent stance.
“The RBA Board minutes and statement in February were fairly hawkish despite the rate cut, so there is some uncertainty as to whether the recent momentum will continue,” she said.
