Australia’s housing market has shifted into its highest gear in four years, with values climbing across all capital cities and regional markets, according to Domain’s September quarter House Price Report.
Sydney, where buyers face one of the world’s longest waits to purchase a first home and one of the most expensive housing markets globally, led the gains with a 3.4% quarterly rise to $1.75 million, while Brisbane’s prices surged 3.7% to $1.1 million, overtaking Melbourne and Canberra to become the nation’s second-most expensive city.
Sydney remains the country’s priciest market, with annual growth of 6.3% and a record-breaking median of $1.752 million. Domain’s chief of research and economics Nicola Powell (pictured) said Sydney could hit the $2 million mark within just two years.
“It only needs a 14.2% increase, which is about $250,000, to shake it to $2 million – and it’s a real prospect for 2027,” she said.
Powell told AAP that Sydney “has always been the most expensive capital city, with high-priced land and high levels of competition.”
Brisbane’s $1.101 million median marks its 11th consecutive quarter of growth, the longest upswing in 21 years. The Queensland capital now sits ahead of Melbourne and Canberra, fuelled by 10% annual price growth and strong population gains.
PRD Real Estate chief economist Diaswati Mardiasmo said supply shortages are magnifying the city’s momentum.
“If I look at the number of apartments that have been approved in Melbourne, it’s literally double the amount of Brisbane,” Mardiasmo said. “We are also still getting a high population growth… and more and more people choosing to live in Queensland.”
All eight capitals posted quarterly price increases, led by Darwin (+5.3%), Hobart (+4.7%) and Adelaide (+3.3%). Perth, with a $981,000 median, is poised to become the sixth city to surpass the $1 million mark by early 2026.
Powell noted that regional Australia outpaced the capitals, with house prices up 3.7% quarterly and 11.5% annually.
“Because we’ve got momentum building, I think we’re going to see a larger number next quarter,” she said, adding that “the housing market has clearly shifted into a higher gear.”
Westpac senior economist Matthew Hassan said limited stock is intensifying buyer competition.
“It’s a very tight market at the moment… we’ve got just over 60,000 properties on the market across the five major capital cities – that’s about two months of turnover, normally we’d have three to four months of stock available,” he said.
Unit prices also strengthened, with 5.8% annual growth across capitals and 10.3% in regional areas. Darwin recorded the strongest quarterly increase at 6.5%, followed by Brisbane, Adelaide and Perth.
Powell said affordability pressures are pushing more buyers toward apartments.
“You have got a sector of buyers now priced out of purchasing a house and steered towards units because of affordability; this leads to a structural change and boost in unit prices,” she said.
For more information, read the Domain and CommBank-AAP reports.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
