iscover
iscover 
Australian housing market sentiment rebounded strongly in the March quarter, with national house prices accelerating and confidence recovering after February’s rate cut. The NAB Residential Property Index rose to +40, well above average, reversing a three-quarter downward trend.
Sentiment improved in nearly all states and territories. The Northern Territory recorded the highest sentiment at +100, followed by South Australia at +80. Although still positive, sentiment dipped in Tasmania to +33, and remained negative in the ACT at -25. NSW and Victoria both returned to positive territory, at +31 and +16 respectively, in line with recent house price growth.
In Western Australia, Queensland and South Australia, most property professionals described their markets as rising or at peak. In Victoria and NSW, the majority saw the markets as being at the start of recovery.
Confidence also surged, as rate cuts appear increasingly likely. NAB now anticipates the RBA will reach a neutral rate of 3.10 per cent by 3Q. Short-term confidence rose to +51, and long-term confidence to +54, both significantly up from last quarter’s below-average readings. Confidence was highest in the Northern Territory and South Australia, and lowest in Victoria and the ACT.
Expectations for house price growth were revised upwards. Over the next year, prices are expected to rise 2.3 per cent on average, up from 1.2 per cent previously. In two years’ time, average growth is forecast at 3.1 per cent, from 2.7 per cent. The strongest one-year outlooks are in the Northern Territory (5.0 per cent) and Western Australia (4.7 per cent), with Victoria lagging at 0.8 per cent.
Longer-term projections increased in all states except Western Australia, where forecasts were slightly lowered. Tasmania (4.8 per cent) and the Northern Territory (4.4 per cent) lead two-year outlooks, while the ACT and NSW are the lowest.
First home buyers’ share of new housing markets dropped to 34.2 per cent, down from a two-year high of 38.2 per cent in late 2024. Owner occupiers, excluding first home buyers, increased their share to 41.7 per cent, while local investor activity fell to 16.3 per cent. Sales to foreign investors edged up to 6.9 per cent, still below average.
Construction costs remain the main challenge for new housing development, cited by 71 per cent of property professionals. Delays in obtaining planning permits (62 per cent) were the next most common issue. Fewer respondents pointed to affordability (15 per cent), interest rates (8 per cent) or labour availability (29 per cent) as major hurdles.
In established markets, owner-occupiers, excluding first home buyers, reached a three-year high share of 46.2 per cent. First home buyers accounted for 32.8 per cent of sales, while local investors dropped to 15.9 per cent – well below average. Foreign buyers rose slightly to 3.1 per cent, with wide variations by state.
February’s rate cut shifted the key constraint for established home buyers. Price levels and lack of stock overtook interest rates in most regions, though rates remained the top issue in Victoria, while NSW buyers cited prices and WA, Qld and SA cited limited supply.
The market share of foreign buyers increased across both new (6.9 per cent) and established (3.1 per cent) housing markets in the March quarter. These gains came ahead of a government ban effective 1 April 2025, prohibiting most foreign buyers from purchasing established dwellings in Australia.
[RELATED: Property markets show mixed trends across Australia]
