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Five years since the World Health Organisation declared COVID-19 a global pandemic on March 11, 2020, Australia’s housing market continues to show the long-term effects of the crisis.
Shifts in migration patterns, interest rates, and economic policy have contributed to substantial changes in housing values and rental prices across the country.
Tim Lawless, CoreLogic’s research director, described the housing market’s trajectory as a "rollercoaster ride" over the past five years. He noted that national housing values have risen by 38% since March 2020 but emphasised that the path to this increase has been "far from straightforward".
"We saw values drop during the early shock of COVID, the market rocketed through the worst of the pandemic, even though international borders were closed through most of this period and population growth has slumped," said Lawless.
A sharp rise in interest rates from May 2022 caused a temporary decline before values increased again due to a housing shortage meeting renewed demand.
National home values have increased by 38.4% since March 2020, adding approximately $227,000 to the median dwelling value. This rise is significantly higher compared to the 20.6% increase in the previous five years and the 14.7% rise in the five years before that.
The market has moved through distinct phases. Initially, housing values dropped by 1.7% in the early months of the pandemic as border closures and lockdowns affected consumer confidence.
By June 2020, prices stabilised, followed by a 33.1% rise between July 2020 and April 2022. During this period, low interest rates, internal migration, reduced household size, and government fiscal measures contributed to increasing demand.
As interest rates climbed from record lows, the market declined by 7.5% over nine months, marking a sharp reversal. However, between February 2023 and October 2024, national values increased by 14.5% despite higher borrowing costs and affordability pressures.
More recent data indicates a stabilisation, with a 0.4% decline between November 2024 and January 2025, followed by a modest 0.3% rise in February 2025.
Regional housing markets have outpaced capital cities. Since March 2020, values in regional areas have increased by 56.3%, compared to a 33.6% rise in combined capitals. House values have increased at more than double the rate of unit values, with houses rising by 44.5% compared to a 20.1% increase for units.
Among capital cities, Perth recorded the largest increase in housing values, rising 75.9% and adding $348,519 to the median dwelling value. Adelaide followed with a 73.1% increase ($347,092), while Brisbane saw a 68.7% rise ($364,305).
In contrast, Melbourne recorded the lowest growth, with an 8.4% increase since March 2020, attributed to prolonged lockdowns, weaker investor demand, and greater housing supply.
Rental markets have also seen significant changes. CoreLogic’s national rental index has risen by 37.6% since March 2020, with house rents increasing by 38.7% and unit rents rising by 35.1%. Perth led capital cities with a 63.9% rise in rents, while regional Western Australia recorded the largest increase nationally at 60.1%.
Lawless also noted that household sizes remain smaller than they were before COVID-19, though this trend is gradually reversing.
Will housing prices stabilise, or will ongoing supply shortages and economic conditions drive further increases? Share your thoughts in the comments.
