National home price hit a new record high in 2025
Getting into the real estate market just got a little tougher after the national house price hit a record $880,000.
The new high in December follows monthly growth of 0.1 percent and 8.8 percent for the year, according to the PropTrack report published on Monday.
House prices in Sydney and Melbourne fell by 0.3 per cent in December, but prices were still higher than a year ago.
(Mick Tsikas/AAP PHOTOS)
The median home value in Sydney reached $1.24 million following annual growth of 6.4 per cent, while Melbourne recorded $854,000 following annual growth of 4.5 per cent.
In Brisbane, the average broke the million-dollar mark to $1.01 million, as the fast-growing Queensland capital recorded annual growth of 14.6 percent.
Adelaide was the best-performing capital city in December; Home prices rose 0.8 percent to an average of $908,000 in December, following a 12.8 percent increase for the year.
Perth also performed very well; It reached an average value of $950,000, following annual growth of 17.2 per cent, with growth of 0.5 per cent per month, in line with Brisbane.
The report stated that regional areas performed better than capital cities throughout 2025, recording higher price increases both within the month and over the whole year, up 0.4 percent.
“House prices are forecast to reach new highs in 2026, but the growth rate is expected to slow,” said Anne Flaherty, senior economist at REA Group and report author.
“Price growth in 2025 was supported by three interest rate cuts.”
Since no further interest rate cuts are expected in 2026, there is a possibility that interest rates will increase if domestic inflation continues.
However, limited housing supply and persistent demand may prevent the Reserve Bank of Australia from increasing interest rates.
“The Australian government’s five per cent deposit scheme is also likely to support price growth by increasing demand, particularly at the more affordable end of the market,” Ms Flaherty said.
Additionally, rising construction costs and a tight labor market for the construction trades will continue to keep the housing supply well below what the country needs, which could therefore cause housing prices to rise.
Data released by PropTrack rival Cotality on Friday revealed home values in Australia rose by 8.6 per cent in 2025, adding around $71,400 to the national average house value.
This was the strongest calendar-year gain in home values since 2021, when the market rose 24.5 percent due to emergency low interest rates and record buying activity during the pandemic.
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