Key takeaways
National property values show steady growth, fueled by low supply and anticipated rate cuts.
Rental markets remain extremely tight, with low vacancies causing rents to re-accelerate nationally.
With house values once again outpacing units, the difference between the national median house and unit value is at a record high.
The Australian housing market has continued its steady recovery, recording its sixth consecutive month of growth in July 2025.
While the pace has moderated, the underlying factors of tight supply and the prospect of lower interest rates are providing a solid foundation for property values nationwide.
The national picture: a balancing act of forces
The national home value index has settled into a stable growth pattern, rising by 0.6% per month since May. This consistency follows a positive turn in February, which coincided with the first official interest rate cut.
Here’s a snapshot of the key metrics shaping the national property market:
| National Indicator | July 2025 Status |
|---|---|
| Monthly Dwelling Value Change | +0.6% |
| Rolling Quarterly Value Change | +1.8% |
| Advertised Listings vs. 5-Year Avg | -20.0% |
| Annual Sales vs. 5-Year Avg | +1.9% |
| National Rental Vacancy Rate | 1.7% |
Source: Cotality, August 2025
How prices stack up across the country
While the national trend is one of steady growth, property values vary significantly between the capital cities. Sydney remains the most expensive market by a considerable margin, while Darwin offers the most affordable entry point.
Here is a look at the median property values across Australia's capital cities as of July 2025:
| Capital City | Median House Value | Median Unit Value | Median Dwelling Value |
|---|---|---|---|
| Sydney | $1,525,956 | $868,341 | $1,228,435 |
| Brisbane | $1,019,865 | $727,110 | $934,623 |
| Canberra | $984,723 | $591,570 | $861,281 |
| Melbourne | $952,339 | $621,281 | $803,424 |
| Adelaide | $895,726 | $611,471 | $843,339 |
| Perth | $869,689 | $615,528 | $831,921 |
| Hobart | $714,691 | $552,352 | $673,383 |
| Darwin | $641,997 | $390,863 | $549,371 |
Source: Cotality, August 2025
Supply vs. demand: the core driver of growth
The primary engine of the current market upswing is the clear imbalance between the number of homes for sale and the level of buyer demand.
- 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 2025–26: Where Prices Are Headed After Three Rate Cuts.
- 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?
- Also read:August House Prices Accelerate as Interest Rates Fall | Latest Housing Market Stats Dr. Andrew Wilson
Note: With national listings tracking 20% below the five-year average, buyers have fewer options. At the same time, sales volumes are 1.9% above the five-year average, indicating that demand remains resilient.
This dynamic has supported strong auction clearance rates, which have consistently remained above the decade average since mid-May, demonstrating a competitive market environment.
The great divide: houses continue to outpace units
The performance gap between detached houses and units has widened once again, reaching a record high nationally. This trend highlights a persistent preference for more space among buyers.
Over the past three months:
- National house values have risen by 1.9%, adding approximately $16,700 to the median value.
- National unit values saw a smaller 1.4% increase, adding around $9,700 to the median value.
Note: This divergence means the national median house value is now 32.3% higher than the median unit value—a significant dollar difference of approximately $223,000.
The rental market: pressure re-accelerates for tenants
For renters across the country, conditions remain exceptionally challenging. The national vacancy rate is holding near historic lows at just 1.7%, leading to a re-acceleration in rental price growth.National rents increased by 1.1% over the three months to July, a significant jump from the recent low of 0.5% recorded in the September quarter of last year. Housing affordability for renters is severely stretched, with the median-income household now needing to dedicate around a third of their pre-tax income to cover rent. This continues to place acute pressure on household budgets, particularly for younger and lower-income cohorts.
Market outlook: cautious optimism ahead
The outlook for the remainder of 2025 remains positive, though growth is expected to be modest and sustainable rather than spectacular.
With core inflation now firmly within the RBA’s target range, an August rate cut appears likely, with potentially two to three more cuts over the next 12 months. Lower interest rates are expected to further improve borrowing capacity and boost consumer sentiment.
Combined with a persistent shortfall in housing supply—both in advertised listings and new construction—the foundations are in place for continued, moderate growth in home values.
While affordability and household debt will act as natural brakes on the market, the tailwinds of lower rates and tight supply are likely to be the dominant forces. The upcoming spring selling season will be a key test, as a seasonal rise in listings will challenge the depth of buyer demand.
