Brisbane, Adelaide and Perth offset softer Sydney and Melbourne to push national median to $880,000
Australia’s residential property market ended 2025 at a new high, with the national median home value rising to $880,000 in December as strength in Adelaide, Brisbane and Perth outweighed easing conditions in Sydney and Melbourne.
According to the latest PropTrack figures, released earlier this week, national prices edged up 0.1% in December and were 8.8% higher over the calendar year.
Sydney and Melbourne both recorded modest declines in December, with median values in each city slipping 0.3% over the month.
Even so, prices in the two largest capitals remain well above year-ago levels. Sydney’s median home value stood at $1.24 million after annual growth of 6.4%, while Melbourne’s median reached $854,000 following a 4.5% rise through 2025.
For mortgage professionals, the figures point to more subdued end‑of‑year conditions in the key east coast markets, but from elevated price bases that continue to test borrowing capacity and serviceability assessments.
Brisbane’s housing market continued to outpace the larger capitals. The city’s median home value moved beyond the $1 million mark to $1.01 million, underpinned by annual growth of 14.6%.
Adelaide was the strongest-performing capital in December, with prices climbing 0.8% over the month to a median of $908,000. Over the full year, Adelaide values increased by 12.8%.
Perth also posted solid advances. Median values there rose 0.5% in December to $950,000, supported by annual growth of 17.2%.
These results signal ongoing demand and constrained stock in the smaller capitals, with implications for loan sizes, loan‑to‑value ratios and purchase strategies in markets where prices are still rising at a faster clip than in Sydney and Melbourne.
Regional markets lead capital city performance
Outside the capitals, regional housing markets continued to outperform in 2025, recording stronger growth both for December and across the year as a whole.
PropTrack reported that regional prices rose 0.4% in December and delivered higher annual gains than the combined capital city markets, reflecting sustained demand and tighter supply conditions in non‑metro areas.
For lenders and brokers focused on regional borrowers, the data confirms that competition for stock and rising valuations remain key features of many country and coastal markets.
Price growth expected to moderate in 2026
Looking ahead, REA Group senior economist Anne Flaherty (pictured right) expects further price increases in 2026, but at a slower pace than in 2025.
“Home prices are predicted to head to new highs in 2026, however, the pace of growth is expected to slow,” she said. “Price growth in 2025 was supported by three rate cuts.”
With no additional interest rate cuts currently anticipated this year, Flaherty noted there is still a risk of higher borrowing costs if inflation remains sticky.
Any upward move in the Reserve Bank of Australia’s cash rate would flow through to mortgage rates, with potential consequences for borrowing capacity, serviceability tests and refinancing demand.
Supply settings, policy support and construction constraints
Flaherty highlighted restricted housing supply and firm underlying demand as ongoing supports for prices, factors that could cushion the effect of any future interest rate rises.
She also pointed to the federal government’s 5% deposit scheme as a continuing source of demand, especially for lower‑priced properties.
At the same time, rising construction costs and labour shortages in the building industry are expected to keep new housing delivery below required levels, adding further upward pressure on prices and limiting options for borrowers seeking newly built stock.
Other data confirm strong year for dwelling values
Separate figures released on Friday by PropTrack rival Cotality also pointed to a strong 2025 for residential values. Cotality reported that Australian home prices increased 8.6% over the year, adding about $71,400 to the national median dwelling value.
This was the largest calendar‑year rise in values since 2021, when prices jumped 24.5% during a period of emergency‑low interest rates and heightened pandemic‑era housing demand.
For mortgage professionals, the combined data sets underline that, despite some late‑year softening in Sydney and Melbourne, 2025 delivered a robust uplift in collateral values across much of the country, with flow‑on effects for loan sizes, equity positions and refinancing activity.
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