Suburbs where house values rose most in 2025

Australian research head Eliza Owen expected the Reserve Bank’s three interest rate cuts this year, which reduced the cash rate to 3.6 per cent, to have a stronger impact on the upper end of housing market values.

“But it’s less surprising when you think about it from an affordability perspective, what people can buy in the Sydney market and how much average incomes differ from a lot of property markets in Sydney,” Owen said.

He noted there was a similar affordability trend in Melbourne. “Again, this is a reflection of buyers skewing towards the lower end of the value distribution,” he said.

With property prices rising faster than incomes, a large portion of potential buyers across the income spectrum are looking at a shrinking pool of buying opportunities, Owen said.

“This leads to rapid pricing out of low-income households who find themselves in the rental market for longer periods of time.”

Owen said rental investment had increased in NSW in the past year as buyers bought an investment property they could afford and rented a home where they wanted to live. He said according to the latest ABS figures almost 10 per cent of first home buyer loans were for investment properties.

Domain’s separate figures showed almost one in 10 potential buyers in NSW were looking for a property in Victoria, but the opposite was also true.

Among Domain.com.au’s NSW users, 9 per cent of property searches this year were for Victoria and 6.9 per cent for Queensland, Domain.com.au’s Year-End Report also published on Thursday showed.

Among Sydney potential buyers on the site, 25.3 per cent of inquiries were for homes in regional NSW.

Victorian users made 9 per cent of their searches in NSW, 4.6 per cent in Queensland and 3.6 per cent in Tasmania.

Melburnians placed 27.6 per cent of their research in regional Victoria.

Field research and economics chief Dr. Nicola Powell speculated that cross-border buyer interest could be driven by the rise of renters trying to get on the property ladder. Others, he said, want to buy a house and move, while others are investors.

“At its core, it’s driven by Australians looking for a need for affordable housing, and that often comes with moving over a border,” he said.

Job opportunities, lifestyle and being closer to family and friends can also trigger moves, he said. Some immigrants to Australia may move to Sydney, stay there for a while, and then move elsewhere; Meanwhile, buyers can choose Queensland for lifestyle or Melbourne for job opportunities and cheaper housing costs than Sydney.

He said east coast buyers were also looking for homes in Western Australia following the property boom of the past few years, but this was starting to wane. Among those looking for property in NSW, 1.9 per cent of searches this year were for Western Australia.

“We know this because investors chase capital growth,” he said. “It’s been our previous quiet achievers who have seen the strongest growth rates… I think it’s starting to slow down.”