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Australian residential property values continued their upward trend in June, with national home prices increasing by 0.4%, according to PropTrack’s latest Home Price Index.
This marks the sixth straight monthly rise, pushing prices to new record levels as the impact of lower interest rates broadens across the country.
Growth is now occurring across all capital city markets, with the gap between the fastest and slowest growing cities narrowing. Adelaide recorded the highest monthly increase at 0.6%, maintaining its position as the strongest capital city market over the past 12 months, with values rising by 9.8%. Brisbane and Perth, which led gains last year, posted slower growth of 0.3% in June.
Sydney and Melbourne saw increases of 0.5% and 0.3%, respectively. These markets, which experienced subdued activity in 2024, are now contributing to national gains. Annual growth rates remain uneven, ranging from 0.5% in Canberra to Adelaide’s 9.8%, but the monthly figures suggest more consistent movement across regions.
The upturn has coincided with a shift in interest rates. Following reductions in February and May, borrowing costs have eased, improving sentiment. A further rate cut is expected in July, which would lift borrowing capacities again. However, price growth continues to be moderated by affordability constraints.
Despite falling interest rates, the housing market is still facing pressure from household incomes that have not kept pace with recent price increases. This imbalance is pushing demand toward lower-priced and mid-tier markets, where median values remain below $600,000. These more affordable areas have seen the highest annual growth, particularly in Queensland and South Australia.
While the lower end of the market has seen the most activity, signs of renewed interest are emerging in higher-priced areas. Certain parts of Sydney, Brisbane, and the Gold Coast have recorded strong quarterly gains, suggesting some recovery in premium segments.
Looking ahead, further price growth is expected in the second half of 2025. However, activity is likely to remain focused on locations where buyers can manage repayments despite stretched affordability.
Population growth and limited housing supply continue to apply upward pressure on prices. But with income growth lagging, the current cycle is moving at a slower pace compared to previous periods of monetary easing. The report describes this as a measured recovery, with values climbing steadily rather than accelerating rapidly.
