The Property Price Turnaround: What the Data Really Tells Us About Australia’s Housing Resurgence

While headlines continue to swirl about affordability crises, interest rate hikes, and potential market corrections, the reality on the ground is quite different, and a lot more optimistic, especially if you know where to look.

A recent report from realestate.com.au using PropTrack data has revealed a surprising but compelling trend: Australia’s property market is roaring back, and in many cases, it’s not just recovering, but surpassing previous peaks.

You read that right—more than two-thirds of suburbs across Australia are seeing house prices at or above their previous market peaks.

So, let’s break this down, suburb by suburb, city by city, and look at what this means for strategic property investors like you and me.

The national picture: a market defying expectations

Since the RBA dropped interest rates to historic lows in 2020, we’ve seen a rollercoaster of housing activity.

The pandemic sparked a boom fueled by ultra-low interest rates, buyer demand, and supply shortages.

Then came the correction in 2022, when the RBA began aggressively lifting rates to combat inflation.

But now, in 2025, the dust has settled, and the market resilience is crystal clear:

• 66% of Australian suburbs have house prices that are now higher than before the rate hikes began.

• 64% of suburbs have unit prices sitting at new peaks.

This turnaround is not uniform, of course, but that's where the opportunity lies for informed investors.

Top-performing capital cities

Let’s start with the clear winners.

Adelaide:

• 98% of suburbs in Adelaide have house prices at all-time highs.

• From inner-ring locales like Norwood and Unley to outer suburbs such as Munno Para and Morphett Vale, the growth is broad-based.

• What’s driving it? Low housing stock, strong population growth, and affordability compared to Sydney or Melbourne.

Brisbane:

• Over 95% of Brisbane suburbs are now trading above their previous peaks.

• Suburbs such as Keperra, Bracken Ridge, and Ferny Hills are seeing renewed demand, thanks to Brisbane’s growing population, infrastructure investment, and comparative value.

With SEQ migration still trending upward, I expect this trajectory to continue, especially in gentrifying pockets with strong owner-occupier appeal.

Perth:

• WA’s capital has long lagged behind the east coast, but Pent-up demand + limited stock + population inflows = rapid price acceleration.

• Areas like Baldivis, Clarkson, and Armadale are now among the fastest-growing affordable markets in the nation.

Interestingly, Perth now has the highest proportion of suburbs with prices at record highs across both houses and units, according to PropTrack.

Regional areas: not just a pandemic trend

Regional Queensland continues to outperform expectations:

• Suburbs in Townsville, Rockhampton, and Bundaberg are seeing new highs, underpinned by employment growth, decentralisation trends, and a renewed push from investors priced out of capital cities.

It’s worth noting that regional price growth is still playing out in markets where infrastructure is improving and lifestyle is a key driver—think tree and sea change movements, which aren’t going away.

What about Sydney and Melbourne?

Contrary to what you might hear in the media, these markets are not struggling—they’re just behaving differently.

• Sydney’s higher price points mean affordability is a real constraint, especially in outer fringe areas. But many inner and middle-ring suburbs are recovering strongly, particularly those with high owner-occupier appeal and limited supply.

• Melbourne is a mixed bag, with pockets of strength in inner suburbs like Fitzroy North and Brunswick, but weaker sentiment in outer growth corridors where the cost of living pressures bite hardest.

This divergence is what makes granular, data-driven suburb selection critical right now.

Why is this happening despite reasonably high interest rate?

This isn’t just blind optimism.

There are some powerful economic and demographic forces at play:

1. Population growth – Net overseas migration is back, and the demand for housing, especially rentals, is surging.

   • Also read:Perth housing market update | May 2025
   • Also read:Jobs, Loans and Listings – What This Week’s Numbers Really Mean for Property | Property Insiders
   • Also read:This week’s Australian Property Market Update – Latest Data, State by State May 20th 2025
   • Also read:Adelaide housing market update | May 2025
   • Also read:Melbourne housing market update | May 2025

2. Housing undersupply – New housing completions haven’t kept pace with demand. Construction costs remain high, and developer pipelines are thinning.

3. Tight rental markets – Vacancy rates below 1% in many areas are forcing renters to consider buying (where they can), and pushing investors to re-enter.

4. Job security – Despite cost-of-living pressures, unemployment remains low, and wages are beginning to rise.

5. Shift in buyer psychology – Many buyers now accept that we won’t return to pandemic-era rates and are re-engaging with the market.

Lessons for property investors

So, what does this all mean for us as strategic investors?

Here’s where wer're advising clients at Metropole to focus:

• Invest in scarcity – Established suburbs with limited development potential and high demand.

• Look for gentrification corridors – Areas where infrastructure, demographics and lifestyle appeal are improving.

• Avoid speculative fringe estates – These might look cheap, but are highly susceptible to interest rate shifts and oversupply.

• Factor in rental strength – With rents still rising, cash flow from quality properties is becoming more attractive again.

• Play the long game – Remember: short-term market noise rarely matters in the context of a 10–20-year investment strategy.

A window of opportunity

Australia’s housing market is not just recovering—it’s accelerating in many areas, even amid economic headwinds.

And if two-thirds of suburbs are hitting new price records during a rate-tightening cycle, imagine what will happen when interest rates keep falling over the next year?

That’s why now is the time to be active, strategic, and selective.

Because while others are waiting for the “perfect time,” the smart investors are already positioning themselves for the next wave.

I see the market moving to the next phase of the property cycle over the next year as interest rates continue to fall.

In general, when interest rates decline, the market tends to experience a surge in activity.

More buyers can afford larger loans, and as demand escalates, property prices usually rise’

Buyers who were previously priced out of the market start to re-enter, and those on the sidelines rush to buy before prices climb too high.

This creates a snowball effect that can rapidly drive up property values.

However, here's the key takeaway: waiting for rates to drop further might mean missing out.

I see the current market offering a window of opportunity for property investors with a long-term focus.

Not that I suggest you try and time the market- this is just too difficult, and in truth, you’ve missed the bottom which occurred two years ago in early-2023.

But if the market hands you an opportunity like this – to get started at the beginning of the next stage of the cycle - why not take advantage of it?

Taking advantage of the upturn stage of a property cycle has created significant wealth for investors in the past.

Moving forward, demand is going to continue to outstrip supply for some time to come as we experience strong levels of immigration at a time when we’re just not building anywhere as many properties as we require.

At the same time, the cost of construction of delivering new dwellings will keep increasing, not only because of supply chain issues and the lack of sufficient skilled labour, but also because builders and developers will only commence new projects if they are financially viable and currently new projects will need to come on line at considerably higher prices than the current market prices.

So it is likely that the price you pay for a well located property today will look very cheap in 10 years’ time.