Key takeaways
Australia’s residential real estate total market value rose to $12.3 trillion in December.
National dwelling values rose 2.9% over the quarter and 8.6% annually, adding an estimated $71,360 to the median Australian dwelling value in 2025.
The monthly pace of growth was easing across most regions through December, but this seasonal effect is normal.
Most capitals are seeing the strongest growth conditions across the lower quartile of the value range, reflecting intense competition for properties with a more affordable price point.
Cotality estimates that almost 561,000 sales have transacted in 2025, a 4.9% increase on 2024 and 7.2% higher than the five-year average.
Median time on market was 27 days nationally, down from 29 days a year ago, with capital city homes selling fastest in Perth (nine days) and slowest in Canberra (37 days) and Darwin (35 days).
While new listings have trended roughly in line with historic averages since mid-September, total advertised stock nationally was 15.8% lower than a year ago in December and 20.6% below the five-year average for this time of the year.
The flow of new listings showed the largest rise across Melbourne, up 15.5% on a year ago in December, with Sydney also showing a substantial 11.6% increase in new listings relative to a year ago.
Nationally, rents lifted 5.2% in 2025, a step up from the 4.8% rise recorded in 2024, but well below the 8%+ annual increase in rents recorded between 2021 and 2023.
Rents have increased across every broad region of Australia, ranging from a 10.1% jump in regional WA to a 2.9% increase in Melbourne.
Want to know what's happening to the housing markets around Australia?
Well... this monthly collection of charts from Cotality (formerly CoreLogic) paints an interesting picture.
A forty-year retrospective on growth in home values from Cotality reveals that Australia’s housing market has a long history of defying conventional wisdom, with periods of extraordinary growth occurring under unexpected conditions.
From soaring values during high-interest-rate environments to surges amid global crises, the data underscores that housing performance is shaped by more than monetary policy alone.
“Sometimes home values surge when you least expect it,” said Tim Lawless, Cotality’s Research Director.
He further said:
“In 1988, with interest rates near 15% and rising, Australian home values skyrocketed by 31%.
Fast forward to 2021, amid a global pandemic and closed borders, national values jumped almost 25%.
These standout years remind us that housing markets are influenced by more than just interest rates. Fiscal stimulus, credit availability, migration trends and economic shocks all play a role in shaping outcomes.”
In order of growth, the top growth years over the past four decades are:
- 1988: 31.2%
- 2021: 24.5%
- 2003: 18.1%
- 2001: 15.9%
- 1987: 15.3%
Compared to other years, 2025 ranked the 11th highest calendar year for value growth over the past forty years.
Mr Lawless added:
“Periods of extreme growth often coincide with broader economic shifts, not just monetary policy.
Over the past forty years, there have only been six periods when home values have fallen.”
Residential real estate underpins Australia's wealth
- The total value of Australian residential real estate was $12.3 trillion at the end of December 2025.
- Outstanding mortgages against all residential housing are only $2.5 trillion - a very comfortable 20% Loan to Value ratio.
- 55.4% of total Aussie household wealth is held in residential property - one of the many reasons neither the banks, the government nor the RBA wants a property crash.
Australian dwelling values
- The quarterly rate of increase in national home values rose from 2.5% in Q3 to 2.9% in Q4, but the monthly trend was starting to ease through the final months of 2025.
- The annual growth trend accelerated to 8.6% in 2025, the fastest pace of growth since the 12 months ending May 2024.
- Every capital and rest of state region recorded a rise in values in 2025, ranging from an 18.9% lift in Darwin to a 4.8% increase in Melbourne values.
- Lower quartile home values have recorded substantially stronger growth in values through the year as competition heats up across the lower price segments of the housing market.
- However, as a property investor, you can always outperform the average.
Our capital city markets are fragmented
Our housing markets are fragmented, with each state performing differently depending on local economic and market factors.
The following chart shows how various price segments of each capital city market are performing differently.
Each State is running its own race
One star performer was Brisbane, where property values increased 14.5% over the last year and are currently at a record high.
- Perth property values are up 15.9% over the year and are currently at a new record high.
- Sydney property values increased 5.8% over the past year but are still -0.1% below their record high in November 2025.
- Melbourne property values are down -0.1% in December, rose 0.8% over the year, but are still -0.9% below the record high seen in March 2022.
- In the previous darling of the housing markets, Hobart, house prices are -5.4 % below their record highs recorded in March 2022.
Here's how the Adelaide property market performed.
- Dwelling values in Canberra increased 4.9% over the last year.
- The Darwin housing market has performed strongly, increasing 18.9% over the year and is currently at a new record high.
Here's how many properties are for sale at the moment
- The trend in new listings is highly seasonal, moving through an upswing through spring and dropping sharply in December before rising into February.
- The flow of new listings was tracking in line with the 5 year average through most of spring, but tailed off to below average levels, finishing the year 5.0% below the five - year average but 1.1% higher than at the same time a year ago.
- The problem is that very few are A Grade homes or investment grade properties. Owners of quality properties are still holding onto them.
- The trend in total listings picked up a little through spring, but not as much as the flow of new listings, highlighting a strong rate of absorption as buyers remained active and homes sold relatively quickly.
- The four -week count of advertised supply ended the year nearly 16% down on the same time last year to be 20.6% below the previous five - year verage for this time of the year.
Transaction volumes
- Monthly home sales tend to show extreme seasonality in December and January, however the annual trend shows a 4.9% increase in the number of home sales nationally.
- The rise was mostly driven by regional parts of the country, where the estimated volume of home sales was 8.1% higher in 2025, compared with a 3.2% rise in volume across the combined capitals.
It's taking longer to sell a home.
- Both the combined capitals and regional markets recorded a subtle rise in the median selling time over the December quarter.
- Capital city homes were on the market for a median of 24 days through the quarter, down from 27 days a year ago.
- Regional homes sold with a median of 32 days on market, down from 35 days over the same period in 2024.
Vendor Discounting
- Discounting rates across the combined capitals have held below the 3% mark over the past three months, with the 2.86% median discount recorded over the three months to November tied as the lowest since May 2021.
- Regional vendors are also offering smaller discounts to secure a sale.
- The median regional vendor discount has shrunk from 3.8% in Q1, to 3.2% over the three months to November.
Auction clearance rates
- Auction clearance rates peaked in late September at 72%, trending lower since that time to be below the decade average of 64% by mid -November.
- By the end of the auction season in mid -December, the weighted average clearance rate had fallen to 57.1%, the lowest reading since December 2024.
- The easing in auction clearance rates ran in parallel with a slowdown in value growth through the end of the year.
- We update the weekly auction clearance results here each week.
We're still experiencing a rental market crisis in Australia.
- The national rental index increased by 5.2% in 2025, a step higher from the 4.8% rise in rents seen through 2024, but well below the 8%+ annual increase in rents recorded between 2021 and 2023.
- The rental vacancy rate tightened compared with 2024, reducing from 2.1% to 1.7% by December 2025.
- Rents have increased in every broad region of Australia, ranging from a 10.1% jump in regional WA to a 2.9% increase in Melbourne.
- With growth in values continuing to outpace the change in rents, national gross rental yields continued to compress in December, falling to 3.56% —the lowest gross yield since September 2022 (3.51%).
- Despite the diminishing yield profile, investor activity has trended higher, with investors comprising 41% of mortgage activity in the September quarter.
Dwelling approvals and housing credit
- Dwelling approvals jumped 15.2% in November, spurred higher by a 36% surge in the highly volatile unit sector.
- Reading through the monthly noise and a clear upswing in unit approvals is emerging, with the six - month trend in unit approvals now about 6% above the decade average.
- Under the same trend analysis, house approvals have seen a more modest trend, holding 3.2% below average levels.
Finance and Lending
- Both the volume and value of new home loan commitments rose sharply over the September quarter, up 6.4% and 9.6% respectively compared to Q2.
- The rise saw the total value of new financing reach its highest level on record with $98 billion in residential mortgage commitments over the quarter.
- Investor activity drove the increases in both volume and value, up 13.6% and 17.6% respectively, while new owner occupier lending saw a smaller 2.0% lift in volume and 4.7 rise in value.
- First home buyers also recorded a rise in both the volume (+2.3%) and value (1.1%) of new financing over the quarter, albeit much milder relative to investors and subsequent owner occupiers.
- This saw first home buyers, as a share of new owner - occupier lending, trend lower to 28.3%.
- First home buyer lending will likely lift through Q4, with the expansion of the 5% Deposit Scheme, introduced on October 1 st , expected to deliver a temporary boost for first home buyer demand.
Source of charts: Cotality Monthly Housing Chart Pack, January 2026
- Also read:Do you know where do you sit on the Wealth Pyramid?
- Also read:Melbourne property market forecast for 2026 | Is it a good time to invest in Melbourne?
- Also read:Latest Property Price Forecasts Revealed. Australian Property Market Outlook 2026: Where To For Prices With Further Rate Cuts Unlikely.
- Also read:Brisbane Property Market Forecast [2026] – What’s Ahead & Where to Invest
- Also read:Sydney property market forecast for 2026. Is it a good time to invest in Sydney?
