Australian housing values have a long history of delivering strong growth during periods traditionally seen as unfavourable for property, according to a new 40-year analysis from Cotality, highlighting the limits of relying on interest rates alone to explain market performance.
The retrospective shows that some of the strongest growth years occurred under unexpected conditions.
In 1988, national home values rose 31.2% while interest rates were near 15% and rising. In 2021, amid a global pandemic and closed borders, values jumped almost 25%. Other standout years included 2003 (18.1%), 2001 (15.9%) and 1987 (15.3%).
“Sometimes home values surge when you least expect it,” said Tim Lawless, Cotality’s Research Director.
“In 1988, with interest rates near 15% and rising, Australian home values skyrocketed by 31%.”
“Fast forward to 2021, amid a global pandemic and closed borders, national values jumped almost 25%.”
Mr Lawless said the data reinforces that housing outcomes are shaped by a wider set of forces than monetary policy alone.
“These standout years remind us that housing markets are influenced by more than just interest rates. Fiscal stimulus, credit availability, migration trends and economic shocks all play a role in shaping outcomes.”
Despite easing momentum late last year, 2025 ranked as the 11th highest calendar year for value growth over the past four decades.
“Periods of extreme growth often coincide with broader economic shifts, not just monetary policy,” he said.
“Over the past forty years, there have only been six periods when home values have fallen.”
Cotality’s January Housing Chart Pack shows Australia’s total residential real estate market value reached $12.3 trillion in December.
National dwelling values rose 2.9% over the quarter and 8.6% annually, adding an estimated $71,360 to the median Australian dwelling value in 2025, with lower-priced homes continuing to record the strongest growth across most capital cities.
