Housing Fever

Australia

The Australian housing market maintained upward momentum into mid-2025, though regional patterns diverged. Sydney and Darwin prices have resumed growth after a short period of consolidation, while Perth, Adelaide, and Brisbane continue to accelerate more sharply. Hobart remains below its 2022 peak, showing a gradual recovery, and Melbourne remains largely flat. Overall, national prices have risen steadily since late 2022.

Price-to-rent ratios show moderate increases in Adelaide, Brisbane, and Perth, with milder rises in Darwin and Hobart. In other capitals, ratios are largely unchanged, indicating that rents and prices have been moving broadly in tandem.

The fever index points to persistent overheating pressures in several mid-tier markets. Adelaide, Brisbane, Perth, and Hobart all exhibit clear upward trajectories in speculative intensity, surpassing their 2021-22 levels. In contrast, Sydney and Melbourne remain comparatively subdued, reflecting more balanced underlying fundamentals.

New Zealand

The New Zealand housing market has stabilized following the sharp correction of 2022. Both national and regional price-to-rent ratios have remained steady, suggesting a broad equilibrium between housing prices and rental income.

At the same time, the fever index reveals regional divergence. Wellington’s index has risen notably, signalling mounting speculative pressure, and Otago continues to trend downward. Other regions, including Auckland, Canterbury, and Waikato, show limited movement, which is consistent with a contained market environment in those regions.

The Australian housing market showed modest divergence in early 2025. Sydney, Brisbane, Adelaide, and Perth maintained clear upward momentum, while Hobart, Canberra, Melbourne and Darwin remained largely flat.

Price-to-rent ratios remained broadly flat across all capital cities, indicating that rents and prices have moved in tandem. The fever index, however, reveals evidence of some  uneven pressures across the metropolitan areas: in Adelaide, Brisbane, Perth, and Hobart the index signals a rising risk of overheating; in Sydney, Melbourne, and Canberra the index appears stable; and in Melbourne the index is edging lower. At the national level, the fever index held steady.

In the New Zealand housing market the recent general fall in prices appears to have stabilized and the market continues overall to be subdued. But the fever index reveals considerable differences in the region: in Wellington the fever index continued to climb, highlighting deteriorating fundamentals in the city; in Otago the index remains at a much lower level, divergent from the rest of NZ; the remining regions (Auckland, Waikato, Bay of Plenty, and Canterbury) have stayed relatively stable over the last quarter and the previous year.

The Australian housing market showed signs of stabilization and broad-based cooling in the first quarter of 2025. Adelaide, Brisbane, and Perth—previously strong performers—now exhibited signs of slowing momentum, with growth easing across these cities. In contrast, Sydney, Melbourne, Canberra, Hobart, and Darwin saw flat or mildly corrected house prices, continuing their subdued trends from late 2024.

Price-to-rent ratios generally declined across the board, reflecting a combination of rising rental prices and stagnating housing prices. This was particularly evident in Sydney and Melbourne. Brisbane, Adelaide, and Perth—cities that had earlier shown rising price-to-rent ratios—now experienced stabilization or slight reversals, pointing to a more balanced housing dynamic.

Interestingly, the housing fever index showed diverging patterns. Adelaide, Brisbane, Perth, Hobart, and Melbourne recorded strong upward trends in fever levels, signalling a weakening in market fundamentals despite earlier momentum. Sydney and Darwin saw further declines in their fever indices, while Canberra showed a mild upward movement, diverging slightly from its previously neutral stance.

In New Zealand, the housing market remained largely subdued. The fever index in Wellington continued its upward trend, signifying weakening market fundamentals. Meanwhile, Otago’s fever index extended its downward trajectory, reflecting rising rental pressure. Other regions remained stable.