A 40‑year retrospective in Cotality’s Monthly Housing Chart Pack shows Australia’s housing market has repeatedly outperformed expectations, with major growth spikes occurring during periods that traditionally should have weighed on prices.
“Sometimes home values surge when you least expect it,” said Tim Lawless (pictured), 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%.”
“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.”
In order of growth, the top years over the past four decades were 1988 (31.2%), 2021 (24.5%), 2003 (18.1%), 2001 (15.9%) and 1987 (15.3%). By comparison, 2025 ranked as the 11th strongest calendar year for value growth.
“Periods of extreme growth often coincide with broader economic shifts, not just monetary policy,” Lawless said. “Over the past 40 years, there have only been six periods when home values have fallen.”
Australia’s residential real estate market value climbed to $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.
Cotality estimates almost 561,000 sales took place in 2025, up 4.9% on 2024 and 7.2% above the five‑year average. Median time on market fell to 27 days nationally, from 29 days a year earlier, with capital city homes selling fastest in Perth (nine days) and slowest in Canberra (37 days) and Darwin (35 days).
Most capitals are seeing the strongest conditions at the lower end of the market, reflecting intense competition for more affordable stock.
With advertised stock still tracking well below average in many markets and competition fiercest at the lower end of the price range, the latest data suggests affordability pressures are unlikely to ease quickly.
While new listings have tracked roughly in line with historic averages since mid‑September, total advertised stock in December was still 15.8% lower than a year ago and 20.6% below the five‑year average. Melbourne recorded the largest annual rise in new listings, up 15.5%, with Sydney also posting an 11.6% increase.
Nationally, rents rose 5.2% in 2025, up from a 4.8% rise in 2024 but well below the 8%‑plus annual increases seen between 2021 and 2023. Rents increased across every broad region, from a 10.1% jump in regional WA to a 2.9% rise in Melbourne.
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