Australia’s housing market resurgence has broadened, with every capital city posting quarterly growth in both house and unit prices for the first time in four and two years, respectively.
Domain’s June 2025 House Price Report confirms that the housing upswing, previously uneven, has now become national. Demand has rebounded on the back of the Reserve Bank of Australia’s monetary easing cycle, with buyers returning as borrowing capacity improves.
“Improved borrowing capacity, up about 5% from the start of the year, has met still tight listing volumes, reigniting competition and lifting prices, particularly in the east coast capitals where population growth remains strong,” the report said.
Markets are now anticipating another cash rate cut in August, which could further boost sentiment and fuel competition heading into the spring selling season.
However, the RBA’s July minutes revealed a divided board and a cautious stance, with some members favouring an immediate cut and others opting to wait for clearer signs that inflation is easing, despite improving global conditions.
At the same time, APRA has confirmed it will maintain the 3% mortgage serviceability buffer, potentially limiting the full benefit of recent and expected rate cuts.
Sydney and Melbourne led the national rebound in house prices, both recording their strongest quarterly growth in years.
Sydney’s house prices rose 2.6% ($43,882) to a record $1.72 million, delivering a third consecutive quarterly gain and lifting annual growth to 4.2% ($68,808).
“This confirms that price momentum is firmly back,” Domain said.
Melbourne house prices jumped 2.3% ($23,585) to $1.064 million, the highest in three years and the sharpest quarterly increase in 3.5 years. Annual growth turned positive for the first time in a year at 1.6% ($16,785).
Brisbane’s house market marked its 10th straight quarterly gain, rising 2.1% ($22,206) to a record $1.06 million. However, the report notes that annual growth has slowed to a near two-year low of 7.5%, despite the city’s longest growth streak in 21 years.
Adelaide house prices edged up 1.1% ($10,573) to $1.012 million, extending its growth streak to 10 quarters. But quarterly growth was the slowest in more than two years, and annual gains, while still high at 11.5% ($104,266), are down from recent peaks.
Perth’s house prices increased 2.4% ($22,460) to $954,686, achieving an 11th consecutive quarterly rise. While price growth nearly doubled from the March quarter, annual growth has fallen to 9.5% ($82,703) – its lowest in two years.
Unit markets are gaining momentum across the board, with many capitals seeing faster quarterly growth than houses.
“The housing market continues to defy expectations, growing despite several persistent headwinds impeding its growth,” Domain said, pointing to subdued consumer sentiment, high interest rates, and stretched affordability.
The result? Units are increasingly outperforming houses in Brisbane, Adelaide, Canberra, Darwin and Hobart, with the house-unit price gap narrowing to multi-year lows in several cities.
Hobart house prices climbed 3.0% ($21,142) – the city’s fastest gain in over three years – reaching $725,882, a 2.5-year high. This marks four consecutive quarters of growth and an annual increase of 6.5% ($44,032).
Canberra house prices rose 1.1% ($12,140) to $1.07 million, the strongest quarterly result in 15 months, though still 8.8% below the mid-2022 peak.
Unit values in both cities also improved, with Hobart up 0.6% ($3,107) and Canberra up 4.6% ($27,033).
While momentum has returned, Domain forecasts a more uneven growth trajectory going forward. A further rate cut would support affordability, but the report warns of re-acceleration risks if investor credit growth picks up, prompting possible macro-prudential tightening.
“Supply is the swing factor: national dwelling completions are projected to stay well below the annual pace needed to meet population growth,” Domain said.
“Without a meaningful rise in new construction, price pressure – especially for well-located homes – will persist in FY26 even as growth rates diverge by city and dwelling type.”
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
