Melbourne Ends 2024 as the Only Big Capital Going Backwards

Melbourne closed 2024 as the weakest of Australia's large housing markets. CoreLogic's Home Value Index, released on 2 January 2025, showed Melbourne dwelling values fell 3 per cent over the calendar year, at a time when values across the country rose 4.9 per cent, adding about $38,000 to the national median.

Only two other capitals recorded annual declines: Hobart, down 0.6 per cent, and Canberra, down 0.4 per cent. At the other end of the table, Perth surged 19.1 per cent, Adelaide 13.1 per cent and Brisbane 11.2 per cent.

A soft finish nationally

December also brought the first national monthly decline in almost two years, with values slipping 0.1 per cent and ending a run of growth that began in February 2023. CoreLogic's Tim Lawless said the result set the scene for a soft start to 2025, with affordability constraints and high interest rates limiting how much buyers could borrow.

The Reserve Bank had kept the cash rate at 4.35 per cent throughout 2024. According to CoreLogic, growth slowed from 4.1 per cent in the first half of the year to 0.7 per cent in the second half, and five capitals recorded falls between July and December.

Why Melbourne lagged

Several pressures converged on Victoria. Investors had been leaving the market, with commentators pointing to higher land taxes and new rental compliance requirements. The ABC reported that the exodus was creating openings for first home buyers, who were taking an unusually high share of activity in the state.

The ABC noted that after a year of falls, Melbourne had become the third cheapest capital in the country on CoreLogic's measure, a striking shift for a city long counted among the country's most expensive.

The view into 2025

Lawless predicted a multi-speed market in 2025, with rate cuts expected to provide a confidence boost and lift borrowing capacity, enough to keep a floor under prices if not to spark a major new growth cycle. At the time, many economists expected the Reserve Bank to begin cutting in February or May.

Rental markets were cooling too. CoreLogic's national rental index rose just 0.1 per cent in December and 4.8 per cent over 2024, a marked slowdown from the pace of the previous years.

For buyers, Melbourne entered 2025 offering something rare among Australia's capitals: choice and room to negotiate. For sellers, the message from agents was that pricing had to meet the market.