Key takeaways
Vacancy rates fell across all capital cities in May, tightening rental markets after the usual April slowdown due to school holidays and public holidays.
House vacancy rates are now all below 2%, signalling a critical shortage of rental supply. That’s pushing rents up.
April retail sales edged down 0.1% but were still 3.8% higher than last year.
Consumers are spending, but cautiously—particularly as inflation stays sticky in the services sector.
Consumer confidence remains low, but rate cuts expected later this year could trigger a sentiment turnaround.
Despite King’s Birthday weekend distractions, Melbourne recorded the highest auction clearance rate among the capitals.
National auction clearance dipped slightly to 64.3%, but remains historically healthy.
This is shaping up as a tightening cycle—limited supply, strong rental demand, and price support.
First movers stand to gain the most as the market resets and begins its next growth phase.
Now, if you’ve been trying to wrap your head around what’s really going on in our property markets - whether we’re heading into a boom, a bust, or just a big, sideways shuffle today’s Property Insiders show is going to help you cut through the clutter.
Despite ongoing affordability concerns, relatively high interest rates despite two rate cuts, tight rental conditions, and never-ending headlines about a housing crisis, property prices in many parts of the country are rising.
So, what’s really going on beneath the surface?
Have we turned a corner? Is this a temporary bounce?
Are buyers regaining confidence—or are they simply being driven by FOMO again?
These are some of the questions I ask Australia’s leading housing market economist, Dr. Andrew Wilson Chief Economist of My Housing Market in today’s Property Insiders video .
We also provide an update on what’s happening in regional property markets around Australia, changes to house building costs and how our auction markets are performing.
The current state of our property markets
Watch this week’s Property Insider video as Dr Andrew Wilson shares a new data set that clearly shows property trends in each of our capital cities.
This data set tracks daily median house prices based on quarterly data, updated daily, to provide a robust set of figures that clearly show the trends in each capital.
Just to clarify, the following charts represent house prices, not dwelling prices like many other data providers share.
This is because dwelling prices do not truly provide a like-for-like comparison across different states.
For instance, Melbourne has more than 30% of all dwellings classified as apartments, whereas other states have a significantly smaller percentage.
Sydney Property Market
The following chat clearly shows how Sydney median house prices fell in the second half of May 2022 as interest rates started to rise, but then Sydney led the turnaround in Australian house prices in January 2023 as buyer and seller confidence returned.
Dr Andrew Wilson believe Sydney house prices are going to keep rising underpin by strong demand from increasing population as a time when there is minimal new supply.
The strong equity position a many of Sydneysiders have in their homes at a time of falling interest rates will allow many homebuyers to move home and either upgrade or “right-size”.
Melbourne Property Market
The following chart shows that Melbourne media prices did not experience the same dip in values as Sydney did in 2022 when interest rates started to rise.
However, Melbourne did not experience the rise in house prices that all the other capital cities enjoyed over the next few years.
Having said that, there are now signs of the Melbourne property market improving over the last few months, with prices on the rise and auction clearance rates reaching well into the 70% range, which is a positive indicator of future property value increases.
Brisbane Property Market
The following chart shows that Brisbane property values did not dip in 2022 like most other states.
They have continued to rise ever since, supported by strong interstate migration and a robust economy that is creating many new jobs and building infrastructure in preparation for the Olympic Games.
The Brisbane property market is expected to keep rising over the next few years.
Adelaide Property Market
The following chat illustrates how well the Adelaide property market has performed over the last few years.
- Also read:State by State Property Market Outlook by Dr. Andrew Wilson | Property Insiders
- Also read:Sydney housing market update | June 2025
- Also read:This week’s Australian Property Market Update – Latest Data, State by State June 17th 2025
- Also read:Melbourne housing market update | June 2025
- Also read:Auction Report June 14th | Steady Mid-June Results for Auction Markets
However, affordability issues caused property price growth to slow at the end of 2024, and after a dip early this year, it has started to pick up a little.
It is likely that Adelaide property values will continue to rise as interest rates decrease, but not to the same extent as seen in the past couple of years.
Perth Property Market
Despite the Perth property market being the strongest performer among capital cities in recent years, affordability issues are now leading to a slowdown in price growth.
As interest rates fall, it is likely property values will increase a little further, but not to the same extent observed in recent years.
Top Regional Markets
Watch this week’s property inside the video as Dr. Andrew Wilson discusses how the major regional markets around Australia have been performing.
Not surprisingly, they take a lead from their respective capital cities.
House building costs rise again
Watch this week’s Property Insider video chat as Dr. Andrew Wilson explains how building costs in Australia have continued to rise, with the latest figures indicating the largest annual increase in residential construction costs since September 2023.
As you can see from the chart below, home building costs are more than 50% higher than they were at the onset of COVID-19.
Dr. Wilson explains how a surge in demand, driven by low interest rates and government incentives such as the Home Builder incentive (remembered during Covid), initially led to a building boom.
This resulted in a bottleneck for builders, and later, ongoing labour shortages continued to push up costs.
At present, while some materials have decreased in price, others such as bricks, plaster, concrete, and copper pipes are still rising in cost.
This clearly indicates that the cost of building a new house continues to increase.
Steady mid-June results for auction markets
Each week we discussed the latest auction results as these give a good “in time” indicator of what’s happening in our housing markets
Auction markets have continued to report steady results despite a lift in auction numbers following last week’s King's Birthday holiday weekend distractions.
Canberra continues to exhibit early signs of a moderate revival following relatively subdued activity over the past year.
The national weekend auction market reported an average clearance rate of 65.0% over the past week, which was higher than the 64.3% reported over the previous week but lower than the 67.2% reported over the same week last year.
Housing markets will close out the notional autumn selling season over the next few weeks with solid auction activity likely before the quieter winter selling season emerges.
