National dwelling values rose by 0.6% in July, marking the sixth consecutive month of gains, according to Cotality’s latest Home Value Index.
The positive momentum aligns with the first interest rate cut in February, and the pace of growth has held steady over the past three months.
“At the national level, the pace of growth in housing values is no longer accelerating,” said Tim Lawless (pictured), Cotality’s research director.
“Rather, we have seen growth rates holding a little above half a percent from month to month since May as the opposing influence of low supply, falling interest rates and rising confidence run up against affordability constraints and lingering uncertainty.”
All eight capital cities posted price gains, led by Darwin (+2.2%), followed by Perth (+0.9%), while Hobart (+0.1%), Melbourne (+0.4%), and the ACT (+0.5%) saw softer growth.
“While the Darwin trend doesn’t have much influence on the headline numbers, the Top End capital has moved into a solid upswing, posting a 9.7% gain through the first seven months of the year,” Lawless said.
“The mid-sized capitals are also once again standing out, especially Perth, where the monthly pace of gains has accelerated to the fastest rate of growth since September last year.”
The growth cycle is underpinned by low housing supply, with national listings tracking 19% below the five-year average, while annual sales are about 1.9% above average.
The imbalance between supply and demand is supporting auction clearance rates, which have been slightly above the decade average since mid-May.
The rolling quarterly change shows the strongest upswing since mid-2024, with the national index up 1.8% in the three months to July.
House values are outpacing units, rising 1.9% over the quarter, compared to 1.4% for units.
“Such a wide difference comes amid ongoing affordability constraints and a lack of newly built multi-unit housing supply, which seems counterintuitive,” Lawless said.
“Clearly, demand preferences are still weighted towards detached housing options despite the substantially lower price points available across the unit sector.”
The median house value is now 32.3% higher than units, a $223,000 difference – a record gap for the national market.
While combined regional markets rose 1.7% over the quarter, combined capitals edged ahead with 1.8% growth, reversing the nine-month stretch of regional outperformance.
However, some regional areas remain strong, including:
This broad-based lift reflects the convergence in price growth across large, mid-sized, and smaller capitals, with Darwin and Perth leading gains, while Hobart and Canberra lag.
The market entered H2 2025 with renewed momentum, supported by low supply, steady buyer demand, and anticipated rate cuts.
Westpac economist Neha Sharma noted that the Cotality Home Value Index shows the market found a floor in January and is maintaining steady monthly gains.
Auction clearance rates in Sydney and Melbourne exceeded 70% in July, consistent with annual price growth of around 8%.
Westpac, which has called for sweeping economic reforms to improve housing affordability, boost regional growth, and accelerate the clean energy rollout in a submission to the federal government’s Economic Reform Roundtable, expects two more RBA cuts in 2025, with the first anticipated this month to further support mortgage activity.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
