The housing market remains on a firm upward trajectory this spring selling season.
National home prices rose 0.5% in September, extending the upswing to a ninth straight month and lifting values 6.2% higher than a year ago.
The housing market remains on a firm upward trajectory this spring selling season. National home prices rose 0.5% in September, extending the upswing to a ninth straight month and lifting values 6.2% higher than a year ago.
The combination of increased borrowing capacities and lower borrowing costs, stronger buyer confidence and renewed competition is underpinning a broad and synchronised uplift. Home values are lifting in every capital city and regional area, but momentum is shifting.
Price growth in Sydney and Melbourne is re-accelerating, Hobart is rebounding, and Darwin is leading annual gains amid surging investor activity.
Melbourne prices have now fully recovered their 2022 peak, returning to record highs after several years of underperformance and Hobart is rebounding after a period of underperformance, leading monthly gains in September and showing one of the sharpest annual accelerations in price growth across the capitals.
By contrast, previous front runners Perth, Brisbane and Adelaide are normalising after exceptional multi-year runs, with price growth slowing, though prices continue to rise and values remain at record highs.
National annual growth has picked up by 0.8 percentage points since the start of the year. Although the current upswing is broad based and national growth has accelerated in 2025, it remains below the long-run average with stretched affordability leaving limited room for prices to surge at the 20-30% pace of previous booms.
Even with interest rate cuts restoring borrowing power and sentiment lifting, the capacity of households to bid prices higher is capped. Despite recent acceleration, national annual growth of around 6% remains broadly in line with the past decade’s average, not a re-run of the explosive 20–30% surges of earlier booms and still below the past 30-year average annual growth (6.9%).
Market momentum is building amid renewed buyer confidence and improved sentiment, buoyed by earlier rate cuts and the prospect of further reductions.
Annual price growth in regional areas (+7.1%) outpaced the capital cities (+6.0%) in September. Though capital cities led monthly gains, lifting 0.6% month-on-month compared to regional areas with 0.4%.
Comparative affordability and lifestyle demand continue to support stronger annual growth than in the capitals. Prices in both capital cities and regional areas are sitting at record highs.
With enquiries per listing at a three-year high and search activity on realestate.com.au the strongest since late 2021, it's clear more buyers are active. Nationally, house and unit prices are now rising at a similar pace, house prices lifted 0.5% in September, while unit prices nationally rose 0.6%.
National house prices have lifted 6.3% over the past year, while growth in unit values (6.1% year-on-year) has been comparable.
Since the pandemic onset, house values are up 54.1% vs. just 40.5% for units. This highlights the stronger performance of houses over the medium term, driven by increased demand for space and land during and after the pandemic.
The past year’s strongest markets have been concentrated in regional Queensland and South Australia, alongside Darwin and parts of WA, where affordability and investor appetite have amplified gains.
However, over the past quarter momentum has clearly rotated and Hobart (+1.2ppt), Sydney (+0.7ppt), and Melbourne (+0.6ppt) have seen the strongest acceleration in the pace of home price growth. Within these markets, Sydney eastern and inner regions are leading along with Melbourne’s North West.
In contrast, growth has decelerated in Brisbane, Perth and Adelaide over the same period, despite continuing to outperform on annual growth. After exceptional multi-year runs, demand has eased from record highs, and the pace of price growth is stabilising.
Though the pace of growth is slowing, prices in these markets continue to rise and values remain at record highs, with select Adelaide, Perth and regional Queensland markets still outperforming.
This reflects the national pattern, with leadership shifting east as rate cuts restore borrowing capacity. Although more affordable regions have outperformed over the past year, with strength in home buying demand buoyed in these regions as buyers push down the price curve.
With interest rates moving lower this year, momentum in the housing market has strengthened, and national annual growth has picked up by 0.8 percentage points since the start of the year, marking a turnaround from the slower conditions observed in late 2024.
The current upswing is a synchronised expansion, underpinned by lower rates and constrained supply, with a broad-based lift in prices across the country.
Stretched affordability remains a brake on the pace of growth, which has accelerated but is broadly in line with the past decade’s average, below the 30-year annual average, and far beneath the 20–30% surges that defined previous booms.
Looking ahead, the series of interest rate cuts delivered this year, improved sentiment and the October expansion of the Home Guarantee Scheme will add support. And with stock on market constrained and new supply challenged, demand-side stimulus is likely to intensify competition.
The October expansion of the Home Guarantee Scheme and removal of income caps will pull forward some first-home buyer demand by lowering the deposit hurdle, without a commensurate lift in supply responsiveness.
As a result, the housing market is poised for further gains throughout spring, though the pace will vary across cities as momentum shifts.
