Home values hit new record highs in April as prices rise across every capital city. Home prices continued to climb in April, though at a slower rate than the three months prior.
While national home prices continued to rise in April, the rate of growth was slower than that seen over the first three months of the year.
But with further interest rate cuts expected this year, there is a strong chance we could see price growth pick up again.
February’s rate cut, as well as expectations that further cuts are on the cards, are supporting buyer sentiment. And while consumer confidence took a hit in April following the announcement of Trump’s tariffs, it remains well above last year’s levels.
What’s more, the Westpac-Melbourne Institute ‘Time to buy a dwelling’ index is sitting 13.8% higher compared to a year ago, despite falling over the month.
Home prices increased in every capital city over April, with the strongest growth seen in Adelaide (0.3%) and Melbourne (0.25%).
Adelaide has continued its impressive run, overtaking Perth to be the best performing capital city over the past 12 months with growth of 10.8%. Perth and Brisbane followed, with growth of 9.3% and 8.7%, respectively.
Despite Melbourne’s recent recovery, it remains the only capital where prices are lower compared to 12 months ago, down 1.7%.
Sydney (2.5%), Hobart (2.1%), Darwin (4.1%) and Canberra (0.8%) have all recorded modest growth year-on-year.
While prices increased in every capital, the strongest growth in April was seen across Australia’s regional areas.
Regional Queensland and South Australia led the charge, both recording monthly growth of 0.4%.
The national median house price rose 0.2% to $883,000 over April, while units held steady at $659,000.
Comparing year-on-year, however, units have been the slight outperformers, up 3.9% compared to 3.7% for houses. The outperformance of units has been particularly pronounced in the regions, where values are up 5.3% versus houses at 4.5%.
While houses have historically seen stronger capital growth compared to units, the high cost of developing units in the current market, combined with the lower price point at which they sell has led to fewer of these properties being developed.
But with affordability constraints pricing many buyers out of purchasing a house, a growing share are looking to purchase units. This relative increase in demand at the more affordable end is expected to continue contributing to the performance of unit prices in the coming years.
Queensland, South Australia and Western Australia continue to dominate the list of best performing regions. Regional Queensland, in particular, has seen particularly high growth, accounting for four of the top five strongest performing regions over the past 12 months.
Across all states, the best performing regions tend to be in more affordable areas. Though, with prices rising more quickly in these regions, affordability is becoming more challenged.
Following strong rise in the aftermath of February’s rate cut, price growth across Greater Sydney has moderated in April. Across the month, the median home price increased by 0.1% to reach a new peak of $1,118,000. In comparison to many of the other capitals, price growth has been relatively modest in Sydney over the past 12 months, with prices sitting just 2.5% higher vs the capital city average of 3.35%.
Melbourne has been the weakest performing capital city for home price growth over the past five years, but there are signs this is starting to change. Home prices dipped by 2.1% over 2024, but have consistently recorded rises over the first four months of 2025.
Prices are expected to recover further this year, off the back of lower interest rates and increased first home buyer incentives. Investor activity is also on the rise in Melbourne, with the city’s relative affordability compared to the other capitals seen as presenting an opportunity.
In Brisbane, home prices hit a new record in April, rising 0.2% to reach $882,000. Brisbane was the third strongest performer for price growth year-on-year, behind Adelaide and Perth, with prices up 8.7%.
Brisbane has now held the title of Australia’s second most expensive capital city, behind Sydney, for 11 consecutive months. Less than 12 months ago, the median price of a home in Brisbane was less than Melbourne. Now, it is $101,000 higher.
Adelaide saw the strongest growth in home prices of any capital over April, rising 0.3% to reach a new record high median of $804,000. Adelaide has now overtaken Perth as the city with the highest level of growth seen over the past 12 months, with prices up 10.8%.
Home price growth in Greater Perth has moderated significantly from the highs seen last year, with growth of just 0.1% seen in April. Despite the moderation, home prices hit a new high of $779,000 in April, reflecting year-on-year growth of 9.3%.
Driving Perth’s outperformance over the past year has been strong population growth which has outpaced new housing supply, as well as high levels of investor demand.
Hobart has been one of the weaker performing capital cities over the past 12 months, with home values rising by just 2.1%. Price growth was likewise subdued over April at 0.1%.
Home prices in Darwin increased by 0.15% in April and are sitting 0.8% higher compared to a year ago. Houses have significantly outperformed units over the past 12 months, up 5.1% vs 1.7%.
Home prices in Canberra continued to rise in April, gaining 0.2% to reach a median of $852,000. Despite rising every month this year, home prices in Canberra remain 4.5% below the peak levels achieved in 2022.
Contributing to the slower pace of price growth in Canberra relative to the other capitals, housing supply has kept up with population growth in recent years, helping to balance supply and demand.
There are a number of factors at play which will impact home price performance over the remainder of 2025.
The first, is interest rates. While interest rates were already predicted to fall in 2025, the anticipated economic fallout from US tariffs has increased market expectations for rate cuts in Australia.
Lower interest rates will put upwards pressure on prices by reducing borrowing costs and increased buyer confidence. The impact on buyer confidence was clearly seen in the week following February’s rate cut, which saw the highest number of buy searches on realestate.com.au in over three years.
Countering this however, could be the impacts of slower economic growth which could lead to increased unemployment and a rise in distressed sales. However, with less than 1.5% of mortgage holders currently behind on their repayments, unless the economic shock is greater than anticipated, this impact is likely to be minimal.
Front of mind for many buyers at the moment is the upcoming federal election. With housing affordability a key issue, both Labor and the Coalition have announced policy incentives for first home buyers. As a result, many of these buyers may be biding their time until after the election and the launch of these policies.
Whichever party is elected, the combination of increased first home buyer incentives, lower interest rates, and supply side challenges, are expected to contribute to even higher property prices in 2025.
