Australia's home value index ticked 0.7% higher in March, pushing dwelling values up 2.1% over the first quarter, according to figures from Cotality released Wednesday.

Sydney and Melbourne may be in the early stages of a downturn, with values down 0.4% and 0.9%, respectively, from highs seen in November last year.

The overall pace of gains is decelerating, falling from a 2.8% increase in the fourth quarter of 2025, although mid-sized capitals and Darwin are posting growth of at least 1.2% on a month-to-month basis.

However, Perth home values are trending in a different direction, accelerating amid higher interest rates and lower sentiment. Housing values across the western capital gained 2.5% in March to end the first quarter 7.3% higher.

"Overall, early 2026 conditions are shaping up to be more cautious and sensitive to debt servicing shocks, as geopolitical uncertainty and cost of living pressures weigh heavily on consumer sentiment," Cotality said.