According to the PropTrack Home Price Index, the housing upswing is broadening across the country, fueled by interest rate cuts earlier this year that have boosted borrowing capacities and improved buyer sentiment.
National home prices are now 5.3 per cent higher than a year ago, adding approximately $47,900 to the median home value.
Over a five-year period, prices have surged by 50.4 per cent, highlighting the sustained strength of the Australian property market.
Capital city markets rose 0.5 per cent in August and are up 4.9 per cent year-on-year, with values reaching record highs in most major cities.
Darwin and Sydney led the monthly growth among capital cities, rising 0.8 per cent and 0.7 per cent respectively, while Hobart was the only capital to record a decline, falling 0.5 per cent.
Regional markets continue to outperform capital cities, with prices climbing 0.3 per cent in August and 6.6 per cent over the past year.
The five-year growth in regional areas stands at an impressive 65.2 per cent, compared to 46.0 per cent for capital cities, reflecting the ongoing appeal of affordable regional living.
Eleanor Creagh, REA Group Senior Economist, said there have been significant changes in market dynamics across different regions.
“Demand has re-accelerated in Sydney and Melbourne, marking a turnaround from the slower conditions observed in late 2024,” Ms Creagh said.
“Darwin has swung from inertia in 2024 to leading annual growth amongst the capitals.”
Melbourne’s property market is showing strong signs of recovery, with prices rising 0.3 per cent in August, now sitting just 0.6 per cent below their previous 2022 peak.
This resurgence comes after several years of underperformance, with relative affordability and strong population growth restoring the city’s appeal to buyers.
Regional South Australia recorded the strongest annual growth at 13.3 per cent, followed by Darwin at 10.4 per cent, while regional Queensland and Western Australia both saw increases of 9.9 per cent.
The combination of lower interest rates and improved market sentiment is creating favourable conditions for continued price growth, despite some markets showing signs of normalisation after periods of exceptional performance.
“Adelaide and Perth are still growing briskly, but at a slower pace compared to the same period last year,” Ms Creagh said.
Looking ahead, several factors are expected to maintain upward pressure on property prices across Australia.
These include constrained new housing supply, strong population growth, and the upcoming expansion of the Home Guarantee Scheme in October.
“As we enter spring, the housing market appears poised for another leg higher, albeit strengthening in some capitals while normalising in others,” Ms Creagh said.
