Australia’s housing market delivered solid gains in 2025, with national home values rising 8.6%, adding around $71,400 to the median dwelling price, the strongest annual growth since 2021.

All capital cities and regional markets recorded increases, led by Darwin (+18.9%), while Melbourne saw the smallest rise at 4.8%.
However, momentum began to cool in December, when the national Home Value Index recorded its smallest
monthly gain in five months (+0.7%).

Sydney and Melbourne both declined by -0.1%, marking the first monthly fall in over a year. Cotality’s research director Tim Lawless attributes this softening to renewed concerns that interest rates may remain “higher for longer”, along with worsening affordability and cost-of-living pressures.

Growth has increasingly been driven by the lower and middle segments of the market, as affordability pressures continue to steer buyers away from higher-priced homes. Upper-quartile values rose just 0.2% in December, compared with 1.1% growth in the more affordable segments.

Regional markets remain more resilient, posting 9.7% growth for the year, outperforming the combine capitals at 8.2%. Western Australia’s regions (+16.1%) and regional Queensland (+12.6%) were the standout performers.

Outlook for 2026 While 2025 closed strongly, the outlook for 2026 is more cautious. Uncertainty around inflation, interest rates, affordability and household debt is expected to weigh on confidence. That said, ongoing housing supply shortages should help prevent any significant downturn in home values.

For investors and homeowners alike, Perth’s property market presents exciting opportunities. Whether you’re
considering selling, buying, or investing, now is the time to explore your options. Contact our team at
sales@iqiwa.com.au to discuss your property goals today.