Lower interest rates and tight supply drive steady growth across most regions
Home values continued to climb in June, rising 0.6% and marking the fifth straight month of gains after a slight decline between November and January, according to new data from Cotality.
With the exception of Hobart, which recorded a 0.2% fall, all capital cities and regional areas posted monthly increases. Over the June quarter, national values rose 1.4%, building on the 0.9% gain seen in the March quarter and reversing a 0.1% decline at the end of 2023. Regional Tasmania was the only area to record a quarterly decline, falling 0.4%.
Cotality research director Tim Lawless attributed the upturn in part to the easing of interest rates.
“The first rate cut in February was a clear turning point for housing value trends,” he said. “An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher.”
While values have been rising steadily, Lawless (pictured right) noted that the pace remains moderate compared with earlier periods.
“The pace of growth remains mild compared to mid-2023 when the quarterly rate of growth in national home values peaked at 3.3%, and for that matter, positively tepid relative to the extreme 8.1% quarterly peak growth recorded through the height of the pandemic,” he said.
Despite stronger pricing momentum, overall transaction volumes remain subdued. Sales activity in the first half of 2025 has tracked at an annualised rate of 4.9%, slightly under the 10-year average of 5.1%.
On the supply side, the number of homes listed for sale is low. Data for the four weeks to 29 June shows advertised stock levels were down 5.8% from the same period last year and 16.7% below the five-year average.
“Although demonstrated demand is tracking slightly below average, advertised supply is scarce, creating a more balanced market for buyers and sellers,” Lawless (pictured right) said. “Improved selling conditions can be seen in auction clearance rates, which have risen to slightly above the decade average in the last two weeks of June, holding around the mid 60% range.”
Capital cities posted stronger monthly growth than regional areas for a second consecutive month. However, quarterly growth remained slightly higher in the regions at 1.6%, compared with 1.4% across the combined capitals. CoreLogic suggested this trend may soon shift in favour of city markets.
Darwin led the capitals for quarterly growth, with dwelling values rising 4.9%, including a 1.5% gain in June alone — enough to push prices past their 2014 peak. Perth and Brisbane followed with increases of 2.1% and 2.0% respectively. Over the past five years, those two markets have also shown the strongest value growth, up 81.1% and 75.1%.
Looking ahead, Cotality expects the annual growth rate in home values to climb gradually. The national index rose 3.4% over the financial year, and based on the latest quarterly rate, an annualised increase of 5.8% could be possible — slightly above the long-term average of 5.2%.
“Given the upside risk that housing values will accelerate further from here as interest rates reduce, the reality is we will likely see home values rise by more than this over the coming 12 months,” Lawless said. “However, despite the prospect for lower interest rates, affordability constraints will likely temper the extent of a housing market upswing.”
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