Australia’s median home price jumped by $40,900 over the past year, as price momentum strengthened across the country off the back of this year’s interest rate cuts.
National home prices rose 0.4% in June, with values now 4.6% higher than a year ago, according to PropTrack’s latest Home Price Index.
Home-price growth has been slowing down across most parts of the country, but the recent interest-rate cut activity is expected to drive prices higher.
The Reserve Bank has cut interest rates twice already this year and is widely expected to make further cuts in 2025.
Interest rate cuts remain closely watched because they can lower mortgage repayments for homeowners and expand the borrowing power for homebuyers.
REA Group senior economist Eleanor Creagh said national home prices had grown to a new record high.
“As interest rates have fallen, price momentum has strengthened and extended across the country, with all markets recording gains in June,” Ms Creagh said.
![](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 800 450"%3E%3C/svg%3E)
“Capital city markets are leading the upturn, with price growth in all cities in June, following outperformance by Adelaide, Brisbane and Perth in 2024.
The country’s capital cities drove the gains, led by Adelaide where home prices increased 0.6% in June, and 9.8% over the past year.
LJ Hooker West Lakes and Henley Beach sales partner Rosemary Auricchio said the very low supply of properties for sale in Adelaide was driving home prices higher.
“We’re still seeing very good demand, so when buyers find something they like, they need to put a fairly strong offer in to secure the property,” she said.
National home prices rose 0.4% in June, with values now 4.6% higher than a year ago. Picture: Getty
“In some instances, we are getting multiple offers on properties, which is quite good to see in the market.
“We are also still finding that there is a bit of a transition from interstate buyers that are purchasing in Adelaide, either coming back to Adelaide for a lifestyle change or investors looking in certain markets.”
Sydney and Hobart recorded 0.5% month-on-month home price growth in June, while Melbourne, Brisbane, Perth and Canberra moved 0.3% higher during the month.
Melbourne homeowners will be relieved as the city’s annual median home price returned to positive territory for the first time in months, now up 1% for the year to June.
Meanwhile, home price growth in Brisbane and Perth has remained strong, up 8.3% and 7.8% year-on-year, respectively.
Brisbane’s median house price rose above $1 million for the first time in June, marking a new milestone for the city, where home prices have grown by nearly 90% in the past five years.
McGrath Estate Agents New Farm real estate agent Brett Greensill said Brisbane home prices had grown quickly.
“If you were looking for a house only a year ago or so ago, you’d be stunned by what the same house is worth now because home values have just rocketed ahead,” he said.
REA Group senior economist Eleanor Creagh said the capital city markets were leading the home price upturn.
“When we talk to buyers, there’s an element of missing out because they have often already missed out on other places.
“So buyers are often prepared to pay extra just to get something, and that’s what is driving up prices, along with the scarcity of supply here.
“I just don’t see it changing anytime soon, this trend is well established now.”
Outside of the capital cities, home prices in regional areas rose 0.3% last month, and have increased 6% over the past year.
This four-bedroom house in Adelaide’s inner suburb of Pasadena recently sold for $830,000. Picture: Realestate.com.au/sold
While home-price growth in the regions has been slower than the rebound across the capital cities in 2025, regional markets have remained resilient, supported by affordability and lifestyle appeal.
Looking ahead, Ms Creagh said market momentum was building amid renewed buyer confidence and improved sentiment, buoyed by falling interest rates and expectations of another rate cut in July.
“However, the upturn remains measured as affordability constraints keep the pace of growth in check,” she said.
“Further interest rate cuts expected later this year will ease borrowing costs, adding to the momentum in housing demand and reinforcing recent price growth.”
This three-bedroom house in Chermside West – about 11km from the Brisbane CBD – sold for $1.045 million last month. Picture: Realestate.com.au/sold
Population growth and limited new supply have also been placing upward pressure on prices, especially at the more affordable end of the market.
“With interest rates moving lower, these factors are likely to sustain price growth over the second half of 2025,” Ms Creagh said.
“Despite these tailwinds, the upturn remains gradual and stretched affordability will see a more measured upswing than in previous easing cycles.”
No responses yet