Australian mortgage brokers are heading into summer with prices at fresh record highs, but a clear loss of momentum, according to REA Group’s latest home price data.
National home values rose 0.5% in November, pushing prices to a new peak even as the pace of monthly growth slowed compared to October. Over the past year, prices are up 8.7% nationally – adding around $77,900 to the value of the median home, now sitting at about $873,000 and 51% higher than five years ago.
PropTrack’s separate Housing Affordability Report shows that, although prices have surged, affordability strengthened only slightly in 2025 and remains close to record lows.
REA Group senior economist Eleanor Creagh (pictured) said 2025 has delivered firm price growth, but the market is a long way from the breakneck pace of past booms.
“National home prices rose 0.5% in November and are now 8.7% higher than a year ago, the fastest annual growth since mid-2022," Creagh said. "Momentum has firmed throughout 2025, but stretched affordability means growth remains well below the 20-30% annual gains seen in past booms.
“Lower interest rates, increased borrowing capacities, and a recovery in sentiment have underpinned this year’s reacceleration.”
According to PropTrack’s Housing Affordability Index, a median-income household earning about $118,000 could afford just 15% of homes sold nationally in FY25, up from 11% a year earlier, while lower-income households at the 30th percentile could afford only 3% of homes.
Capital city values rose 0.5% in November and are 8.5% higher year-on-year, with prices at record highs across every city except Hobart, which remains 2.8% below its peak.
Perth and Adelaide led monthly gains among the capitals, each rising 0.9%, followed by Brisbane and Canberra at 0.6%. All capitals, however, saw slower monthly growth than in October – a sign that the spring uplift is moderating.
Over the past year, Perth (+15.5%), Darwin (+14.1%) and Brisbane (+13.7%) have recorded the largest capital city gains, while Western Australia (+13.2%) and Queensland (+12.5%) led the regions.
Creagh noted that momentum has rotated across cities over the year.
“Darwin, Hobart, Melbourne, Canberra, and Sydney have recorded a strengthening in annual growth compared with late 2024," she said. "Meanwhile, Brisbane, Adelaide, and Perth continue to record strong price rises, but growth is no longer accelerating relative to this time last year. In each of these capitals, unit growth is outperforming houses both quarterly and annually as buyers pivot toward more attainable options.”
Regional markets continued to outpace the capitals over the past year, with prices up 0.6% in November and 9.3% year-on-year – stronger than the 8.5% annual increase in the capitals.
Over five years, regional home prices have jumped 64% compared with 47% in the capitals, supported by relative affordability and lifestyle appeal. However, REA’s data shows that regional outperformance is starting to narrow, with stronger recent acceleration now coming from the cities.
Creagh said multiple demand-side supports have combined with tight supply to keep prices rising.
“Population inflows, a lift in investor activity, and the expanded Home Guarantee Scheme have reinforced demand, alongside this year’s series of interest rate cuts. At the same time, total stock on market has been tight, and the delivery of new housing remains constrained, tilting conditions toward sellers. These factors point to further price gains through summer.”
A separate Cotality report underscores the strain on household budgets, with mortgage serviceability near 45% of income and renters spending more than 33% of their income on housing, despite higher incomes and RBA rate cuts earlier in the year.
Outlook: More gains, but 2026 growth to moderate
While the near-term outlook points to further price increases, Creagh expects affordability constraints and a pause in rate cuts to cap the pace of growth.
“However, monthly growth eased across the capitals from October’s stronger pace, and with interest rates now expected to remain on hold for an extended period, affordability constraints are likely to see price growth moderate throughout 2026,” she said.
PropTrack senior economist Angus Moore similarly warned that, although conditions improved modestly in 2025 thanks to higher income growth and lower rates, affordability “remains near record lows”, and with home prices already up 7% since the start of 2025, “affordability will remain challenged in the year ahead.”
For brokers, that suggests a 2026 landscape where:
In short, the market is still climbing, but with less heat – making tailored advice and careful structuring of loans even more critical for borrowers navigating record price levels and affordability still near its worst on record.
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