Australia’s housing market appears to be well on the way to recovery, with dwelling values posting further growth in March.
President Trump’s tariffs are roiling markets around the globe, causing gyrations in the US stock market and painful spikes for long US Treasury yields.
The worst case scenario of a global recession could give a boost to Australian housing values, however, by increasing the sector’s safe-haven appeal and driving the RBA to accelerate rate cuts.
The housing market has bounced back from its recent short-lived dip, with property values lifting 0.4 percent in March, according to CoreLogic’s national Home Value Index.
March marks the second month of growth in the Home Value Index, reversing three months of consecutive decline that began at the end of last year.
Gains in Australian housing prices were consistent across the country, with every capital city posting gains with the exception of Hobart, which saw a 0.4 percent decline.
Tim Lawless, research director for CoreLogic, said the recovery in price growth was driven by the Reserve Bank of Australia’s (RBA) February rate cut.
“Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values, along with the cut’s direct influence of a slight improvement in borrowing capacity and mortgage serviceability,” Lawless said.
The RBA's decision to maintain the official cash rate at 4.10% in April has not dampened market expectations of further easing. ANZ Research anticipates three consecutive 25 basis point cuts in May, July, and August, potentially bringing the cash rate down to 3.35% by August. Similarly, NAB forecasts a more aggressive approach, predicting a 50 basis point cut in May, which would lower the rate to 3.60%.
CrowdProperty CEO David Ingram said that the improving sentiment following the February rate cut is beginning to unlock new opportunities for SME developers.
“We’re seeing early signs of renewed confidence among our developer community,” Ingram said.
“Lower interest rates are lifting borrowing capacity and easing serviceability pressure — factors that improve the feasibility of smaller, well-located residential projects.
"While access to finance remains selective, the right projects in the right locations are now attracting stronger interest and we've seen a significant spike in loan enquiries as a result," he said.
The cost of residential construction has posted a sharp slowdown in growth, which could bode well for smaller developers.
CoreLogic’s Cordell Construction Cost Index (CCCI) lifted just 0.4 percent nationally over the March quarter, representing the smallest rise in 15 years.
The figure marks a major decline compared to the annual rise of 2.9 percent over the 12 months to March 2025.
Lawless said the development could serve to boost the feasibility of projects for smaller developers, especially amidst ongoing gains in Australian housing values.
“While growth in construction costs eased over the quarter, the cost to build a dwelling is still rising from an already high base,” Lawless said.
David Ingram said the moderation in input costs is a welcome development for smaller developers.
“After years of escalating costs and supply chain challenges, this slowdown in construction cost growth is a critical shift,” he said.
“When you combine this with even modest property value gains, the feasibility equation becomes more favourable for SME developers. We expect more projects to become viable in coming months, particularly in locations where planning changes are opening up infill opportunities.”
Popular attention is now focused on Trump’s aggressive tariff measures, levied against all of America’s trading partners. The move could spark a trade war and in a worst case scenario lead to a global recession.
Eleanor Creagh, senior economist at REA Group, said to Realestate.com.au that tariffs could have ambivalent impacts on Australia’s property market, with the outcome still uncertain for housing values.
The tariffs could increase the cost of construction materials - which would push housing prices higher for both new builds and renovations.
According to Creagh, if the tariffs undermine global economic growth, this could prompt the RBA to accelerate interest rate cuts, spurring demand for housing.
“It’s fairly unclear what the end outcome will be at this stage, and for the housing market, it’s likely a tug of war with headwinds and tailwinds,” Creagh said.
While economic conditions continue to evolve, Ingram emphasised that the underlying supply challenge remains a dominant force with the potential to shape the market.
“Australia’s housing shortage isn’t going away, it’s getting worse,” Ingram said.
“SME developers have the ability to bring well-located, smaller-scale projects to market faster than large developers. What they need is consistent access to finance and a planning system that supports medium density. Solving the supply crisis means empowering these capable local developers to build more of the homes our communities need.”
While Trump’s shock tariffs could have dire implications for the global economy, John Lindeman, CEO of Property Power Partner Ltd., said Australia’s housing market is on track to remain resilient, and perhaps even boom amidst the turmoil.
“Our property market has always boomed during times of international strife, economic uncertainty and global recession because Australia is seen as a safe haven, located far away from all the trouble spots,” Lindeman said.
“If and when economic and social conditions deteriorate overseas, more people will be motivated to move here, not only keeping our economy in growth but also putting more pressure on an already acute housing shortage.”
Lindeman points out that any recessionary conditions that arise as a result of Trump’s trade war could also create tailwinds for our housing market in the form of rate cuts from the Reserve Bank of Australia (RBA).
“Central banks are expected to compensate for higher tariffs by cutting interest rates and Australia is no exception, with our own Treasurer claiming there could be four more rate cuts this year alone,” Lindeman said.
“So not only are we largely insulated from the trade tariff wars, we could expect lower interest rates and more permanent overseas arrivals from less fortunate countries.
“Another property market boom is on its way.”
Additional opportunities are emerging for developers as state governments move to fast-track housing supply through planning reforms. In April, the NSW government introduced new measures allowing buildings of six to eight storeys within 400 metres of train stations and shopping centres, and up to three storeys between 400 and 800 metres from these locations.
NSW is also permitting the development of dual occupancies and has made adjustments to floor space ratios that pave the way for large-scale projects spread across multiple sites.
For these reasons, SME developers should prepare themselves now for further opportunities in the Australian property market in the near-term. Irrespective of how a Trump-led trade war plays out, the significant need to build more homes in Australia remains.
Even amid global uncertainty, Australia’s housing market remains underpinned by strong fundamentals. Lower interest rates, easing construction costs, and urgent supply-side demand are creating a more favourable environment for development.
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Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
Australia’s housing market has already emerged from a brief downturn, just as the Reserve Bank of Australia (RBA) announced the anticipated rate cut in February.
Home price growth could remain slow in 2025, however, given challenging affordability and weak migration weighing on demand.
A three-month housing downturn came to an end in February, with CoreLogic’s national Home Value Index (HVI) posting a 0.3 percent rise for the month.
CoreLogic head of research Tim Lawless says anticipation of action from the RBA helped bring the housing market downturn to an early end.
“Expectations of lower interest rates, which solidified in February, look to be flowing through to improved buyer sentiment,” he said.
“Along with the modest rise in values, we have seen an improvement in auction clearance rates, which have returned to long-run average levels across the major auction markets.”
While the consensus is there will be a string of rate cuts in 2025 providing succour to the property market, leading analysts expect only slow growth this year, given the poor affordability of Australian housing.
Westpac’s Matthew Hassan foresees only three percent growth in home prices this year, with the positive impact of rate cuts from Australia’s monetary authority offset by affordability issues and limited supply.
The bank’s Housing Pulse report expects the RBA to reduce its target cut by 75 basis points in total this year, following its 25 basis point reduction in February.
Given recent historical performance, however, Hassan says the impact of these rate cuts on housing prices remains uncertain.
“Markets are coming off a cycle that was surprisingly disconnected from interest rates,” Hassan said.
Demand could also ease on the back of slower population growth. The Centre for Population expects net overseas migration to post further declines, as a recent wave of visa approvals peaks, and arrivals thin out while departures see increases.
Any reduction in migration will result in a short-term decline in demand for rental accommodation, as well as lower demand from home buyers over an extended timeframe.
On the other hand, a major tailwind for housing prices could be disappointing levels of new builds, with Australia already lagging well behind schedule on the National Housing Accord’s 2029 target of 1.2 million new homes.
Only 44,884 new homes were built in Australia in the September quarter - the first following the start of the Accord on 1 July. The Property Council of Australia noted the property sector will need to build new homes at a clip of 60,000 units each quarter in order to satisfy the Accord’s ambitious target.
ASIC has signalled a marked intensification of its focus on the private credit market, particularly in relation to retail investors. In its February 2025 discussion paper Australia’s Evolving Capital Markets, the corporate regulator underscored concerns around ‘opacity, conflicts, valuation uncertainty, illiquidity and leverage’ in private credit funds, warning that while the sector is not yet systemically important, it remains untested by prior crises and failures ‘are on the horizon’.
CrowdProperty COO, Tony Zulli said that with significant growth of private markets in recent years, ASIC estimates the private markets sector globally is now worth over US$3 trillion.
"Although the sector is currently subject to high standards of governance and transparency, the regulator is now consulting with the industry to ensure the current high standards are retained and improved where appropriate," Zulli said.
In its discussion paper, ASIC states: ‘Private markets may be becoming more democratised and accessible to a wider range of investors. However, they also carry different risks, including those related to illiquidity, leverage, conflicts and valuation uncertainty. The opacity of private markets poses a challenge for informed investor decision-making and raises questions regarding appropriate regulatory oversight of these risks.’
"Opacity, or transparency, is the heart of the issue," Zulli said.
"At CrowdProperty, we welcome the focus on standards and transparency as this has been core to our values since inception in the UK in 2013 and now in Australia.
"Investors are seeking yield and diversification in private debt, and robust oversight can support more informed participation in the sector. What’s key is maintaining the flow of capital to high-quality, well-managed projects.”
While ASIC sharpens its focus on the risks in private credit markets, conditions on the ground could prove favourable for SME property developers, at least in the short term. CrowdProperty property director, Brian Cullen said the sheer volume of capital currently looking for deployment is reshaping the borrowing landscape.
“We currently see large amounts of capital on the sidelines in the private credit market,” Cullen said.
“This is creating a very competitive borrowing marketplace and will place downward pressure on interest rates to both investors and developers.”
For developers, this surge of available capital, combined with slower-than-expected project commencements across the sector, means lenders are jostling for deals. Cullen notes that this dynamic will persist until market forces rebalance.
“Until we move through that cycle and demand meets supply, we expect high levels of competition between lenders in the non-bank space, which will only benefit borrowers.”
While good news for developers, this competition also presents opportunities and challenges for investors seeking yield in private debt. As the market adjusts, balancing competitive returns with prudent risk management will be key for non-bank lenders and their investors.
Keenly aware of the lag in new home builds, local governments in NSW and Victoria are making haste to expedite higher-density developments.
Rob Flux, developer and educator at the Property Developer Network, said two major moves in these states will create strong opportunities for smaller developers.
The first is the release of new compliance codes in NSW at the end of February, which give extra density and additional rights to anyone wanting to do fast-track approvals for duplexes, townhouses and low to medium-rise developments located within 800 metres of major transport and shopping centres,
“They’ve identified 173 different growth areas where there will be extra density, and local government can’t refuse,” Flux said.
Flux also points to Victorian Premier Jacinta Allen’s announcement that she wants to transform the state into the “townhouse capital of Australia”.
“They are going to be releasing a fast-track approval process for duplexes and townhouses in Victoria - a brand new opportunity that’s never been seen before.”
“These are very big moves from both these states to help solve the Australian housing crisis.”
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
Australian housing prices held steady in January, despite a slight drop in dwelling values for capital cities.
Dwelling values have potential to rise as improving buyer confidence — driven by the prospect of a rate-cutting cycle from the Reserve Bank of Australia (RBA) — combines with ongoing weakness in new home approvals.
CoreLogic’s national Home Value Index (HVI) held steady in January, posting a mere 0.03 percent decline. In the capital cities the mood of the market proved more dour, with home prices falling 0.2 percent, compared to a rise of 0.4 percent for regional Australia.
Three out of eight capital cities in Australia saw home price declines in January, led by Melbourne (0.6 percent), followed by the ACT (0.5 percent) and then Sydney (0.4 percent).
The current cycle of home price growth is fast shedding momentum, with annual growth in the HVI halving to 4.3 percent for the 12 months ending in January 2025, compared to 9.7 percent for February 2024.
The RBA implemented a long-awaited reduction to the cash rate at its latest monetary policy meeting held on 18 February, potentially ushering in a new rate cutting cycle with a 25 basis point cut.
CrowdProperty Australia CEO David Ingram said the RBA’s decision to lower interest rates signals a critical shift for SME developers, creating both immediate opportunities and longer-term strategic considerations.
“In the short term, lower borrowing costs will provide some relief for SME developers, making it easier to secure finance and improving project feasibility,” Ingram said.
“For those looking to acquire sites or progress stalled projects, this creates a window of opportunity before the market fully reacts.”
However, Ingram cautioned that a single rate cut is unlikely to drive an immediate surge in demand or affordability, with the broader impact dependent on whether this marks the start of a sustained easing cycle.
“If further cuts follow in the coming months, we’ll see renewed buyer confidence and stronger pre-sales activity, both of which are critical for unlocking new development opportunities,” he said.
“However, other challenges remain — construction costs are still elevated, and labour shortages continue to constrain delivery timelines.
“SME developers who move strategically — by identifying viable sites, securing finance early, and structuring projects to align with shifting market conditions — will be best positioned to capitalise on this changing landscape.”
Rob Flux, developer and educator from the Property Development Network, said market sentiment was beginning to shift, factoring in the anticipated cut.
Flux said that despite the change in sentiment, property prices won’t be significantly affected until later in the year, assuming the RBA rounds off a series of rate cuts.
The market is expected to witness an uptick in demand on the back of reduced borrowing costs.
“While market inquiries will pick up, it will still take some time for affordability to kick in,” he said. “There need to be three or four more cuts before affordability starts to become a factor.
“The opportunity that sits before us is to seize properties now or in the coming months before a wave of people start to enter the market.”
Despite the nationwide push to increase Australia’s home supply, new home approvals continue to fall short of the federal government’s National Housing Accord target.
According to Karen Dellow, senior data analyst at PropTrack, new home approvals need to average 20,000 per month if Australia wants to achieve the goal of creating 1.2 million new homes by mid-2029.
The average has been just 14,800 per month since the start of the current financial year. While approvals have seen an upward monthly trend since March, at an average of just two percent per month, this is far from sufficient to meet the target volume.
If this situation persists, Australian home prices is expected to receive upward pressure over the long-term from persistent supply constraints.
David Ingram said persistently low dwelling approvals remain a major hurdle for SME developers, despite a modest upward trend in recent months.
“Karen Dellow’s analysis highlights the stark reality that Australia is still well short of the approvals needed to meet the federal government’s housing targets,” he said.
Ingram noted that while the overall volume of approvals remains insufficient, the composition of new projects is also shifting in ways that affect SME developers.
“We’re seeing fewer affordable, entry-level homes being approved, largely due to rising construction costs and the pressure on developers to maximise returns. This trend risks further exacerbating housing affordability challenges,” he said.
Despite these headwinds, Ingram believes there is opportunity for agile SME developers who can navigate the current market conditions.
“As larger developers focus on high-end projects, SMEs who can efficiently deliver well-located, mid-market — or ‘missing middle’ — housing will be well positioned to meet demand,” he said. “The key is securing finance and sites early while the market remains in a constrained approval cycle.”
Scott French, senior lecturer in economics, UNSW Sydney, expects the tariffs to reduce steel and aluminium costs by putting a dent in US demand.
“Because the tariffs will make steel and aluminium more expensive to US manufacturers, they will seek to reduce their use of them,” French wrote. “This means global demand for the metals will decline.”
However, the broader impact remains uncertain. Global trade policies can have unintended consequences, and while cheaper materials may be one outcome, there are several factors that could push costs in the opposite direction.
Ingram said that while there is a possibility that Trump’s tariffs could lead to lower steel and aluminium prices, trade policies often have complex ripple effects.
“The outcome will depend on global supply chain responses, currency movements, and how Australian suppliers adjust to shifting demand,” he said.
“SME developers should keep a close eye on how these factors evolve, as they could either create cost-saving opportunities or introduce new inflationary pressures on materials."
Ingram believes there might be short-term benefits, with talk of US tariffs driving lower steel costs and aluminium prices as China focuses on other markets.
“Right now, we do have clients looking to take advantage of the situation by shopping in China for materials to lower their cost of construction back here in NSW.”
“However in the long term increasing global trade protectionism is not good for anyone, and will drive inflation,” he said.
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
