Australia’s property market is heating up again, with the national median home price rising $40,900 over the past year, driven largely by interest rate cuts that have boosted buyer demand.
According to PropTrack’s latest Home Price Index, national home values rose by 0.4% in June, bringing the annual increase to 4.6%. While growth had been slowing earlier in the year, momentum is clearly building once again.
Interest Rate Cuts Driving the Market
The Reserve Bank of Australia (RBA) has already implemented two rate cuts in 2025, and further reductions are widely expected. For buyers and homeowners alike, this is significant—lower interest rates mean cheaper mortgage repayments and greater borrowing power, which opens the door for more people to enter the market or upgrade.
What’s Happening Around the Country?
Australia’s housing market continued its upward trend in June 2025, with national home prices rising by 0.4% month-on-month. The gains were largely driven by capital city markets, which have led the recovery in recent months. Adelaide once again outperformed all other capitals, posting a 0.6% rise in June and holding its position as the strongest-performing city over the past year, with prices up 9.8%.
Sydney and Hobart also recorded solid monthly increases of 0.5%, while Melbourne’s 0.3% rise marked a continuation of its gradual recovery, though values in the city still remain 1.1% below their peak. Brisbane and Perth have both seen strong annual growth, up 8.3% and 7.8% respectively. Notably, the median house price in Brisbane has now climbed above $1 million, reflecting a $68,300 increase over the past year.
Regional markets also posted modest growth, with a 0.3% rise in June. Annual growth in the regions came in at 6.0%, outpacing the combined capital cities’ growth of 4.1%. While regional areas haven’t matched the pace of the capital city rebound in 2025, they remain resilient. Their ongoing strength is underpinned by affordability and lifestyle appeal, with regional house prices now more than 65% higher than five years ago.
Scarcity of listings remains a key issue, driving competitive conditions among buyers. As one market analyst noted, many buyers are now willing to pay a premium just to secure a property, especially after missing out on previous opportunities.
With further interest rate cuts anticipated later this year, borrowing costs are expected to ease even more fueling demand and adding to recent price gains.
Population growth and limited new housing supply are also pushing prices up, particularly in more affordable segments of the market. While the current upswing is gradual compared to previous booms, many experts agree that the trend is likely to continue through the second half of 2025.
As the property market moves into the second half of 2025, shifting conditions are creating both urgency and opportunity. With interest rates expected to fall further and demand showing no signs of easing, the market is likely to remain competitive, especially in areas offering relative affordability and strong lifestyle appeal. Whether entering the market or making your next move, staying informed and acting strategically will be key to navigating what’s shaping up to be a dynamic period in Australian real estate.