Home prices rose to record highs in February | Latest Proptrack Report

Key takeaways

National home prices lifted 0.40% in February to hit a new record.

February’s bounce has reversed the small price falls seen in recent months, and national prices are now sitting 3.94% above their levels a year ago.

After leading the small falls in recent months, capital cities also led the bounce in prices, lifting 0.45% in February. In contrast, regional areas recorded a 0.28% rise in prices over the month. Prices in both capital cities and regional areas are sitting at record highs.

Melbourne (+0.67%) and Sydney (+0.50%) led price gains in February, while Hobart (-0.03%) was the only capital to see prices fall.

Melbourne led prices gains for both houses and units across the capital cities, for the first time since February 2020 for houses and September 2020 for units.

Behind Darwin, Melbourne and Sydney have seen the fastest acceleration in home price growth over the past quarter. Adelaide, Hobart and Perth have seen the fastest deceleration.

In Perth, Adelaide and Brisbane, growth has slowed in recent months. However, they remain the strongest performing capitals over the past year, with prices up 13.12%, 11.91% and 10.21%, respectively.

Despite capital cities leading the price rebound, annual growth in regional areas (+4.54%) has outpaced that of capital cities (+3.70%). Poor affordability and a surge in choice throughout spring tempered price growth in the capitals.

National home prices rebounded as interest rates fell in February, lifting 0.40% to hit a new record and reversing the soft start to the year according to the latest PropTrack Home Price Index.

February’s bounce has reversed the small price falls seen in recent months, and national prices are now sitting 3.94% above their levels a year ago.

Ms Eleanor Creagh, Senior Economist at PropTrack commented:

"National home prices rebounded as interest rates fell in February, reversing the soft start to the year.

Market sentiment has improved now that interest rates have started to move lower.

The prospect of rate cuts had already bUoyed sentiment, with clearance rates strengthening in every capital city in early February compared to the final months of 2024."

Source: PropTrack Home Price Index. February 2025

Ms Eleanor Creagh, further explained:

“February's rate cut boosted borrowing capacities while improved affordability and buyer confidence have driven renewed demand and price growth, reversing the falls of recent months.

Beyond interest rates, structural factors underpinning home prices remain at play.

Population growth remains elevated, though has begun to moderate, and a chronic shortage of new homes remains.

Looking ahead, prices are expected to continue lifting and interest rates are expected to fall further.

However, this rate cutting cycle is expected to be modest and the challenged starting point for affordability will likely temper gains compared to past easing cycles, resulting in the pace of home price growth trailing the strong performance of recent years.

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.