Figures show modest gains amid low supply and tighter borrowing conditions
Australian dwelling values rose again in January, with Cotality’s Home Value Index posting a 0.8% monthly increase, up from 0.6% in December.
All capital cities and broad regional markets recorded gains, although the pace and strength of growth varied across locations.
Sydney and Melbourne continued to drag on the national result. Sydney values lifted 0.2% in January and Melbourne 0.1%, reversing small declines recorded in December but leaving both markets below their recent peaks. Sydney home values sit 0.1% under the high reached in November 2025, while Melbourne remains 0.7% beneath the record set in March 2022.
The mid-sized capitals are still recording comparatively stronger outcomes, though their earlier acceleration has eased. Perth led the capitals in January with a 2% rise, down from a month-on-month peak of 2.9% in November 2025. Brisbane’s monthly gain has slowed from 2% in October to 1.6% in January, while Adelaide’s growth stepped back to 1.2% after a 1.8% lift in December.
Regional Australia outperformed the capitals in January, with Cotality’s combined regionals index rising 1%, compared with a 0.7% increase across the combined capitals.
“Despite the most unaffordable conditions on record in many cities, along with a rebound in cost of living pressures and prospect of a rate hike as early as this Tuesday, we are still seeing a broad-based rise in housing values,” said Tim Lawless (pictured right), research director at Cotality.
“The ongoing capital gains reflect persistently low inventory in the face of above average housing demand. However, we are likely to see demand side pressures gradually ease in 2026.
“Affordability and serviceability constraints are likely to naturally dampen demand, but also renewed cost-of-living pressures and a strong chance that interest rates will rise. There is also slowing population growth to consider.”
For-sale stock remains tight, with Cotality estimating that the number of homes listed is 19% below the level seen at the same time last year and 25% beneath the five-year average for this point in the calendar.
Over the same period, the rolling quarterly volume of sales is assessed to be 1% higher than a year earlier and only 3% below its five-year norm, suggesting demand is still absorbing limited supply.
Lower-priced stock continues to underpin much of the growth, particularly in detached housing. Across the combined capitals, house values in the lower quartile increased by 1.3% in January, compared with a 0.3% rise at the upper quartile.
“This trend of stronger growth conditions at lower price points is supported by intense competition for more affordable houses,” Lawless said. “This is where first-home buyers, investors and, progressively, mainstream demand is most concentrated.”
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