Australian House Prices Surge at Fastest Rate in Four Years

Australia’s housing market has accelerated sharply, with national house prices rising at their fastest pace in four years. The latest Domain House Price Report shows that every capital city recorded quarterly growth, led by substantial gains in Sydney, Melbourne and Brisbane.

Sydney continues to dominate the market, with its median house price climbing 3.4 per cent, or about $58,000, over the September quarter to reach a record $1.75 million. Domain’s chief of research and economics, Dr Nicola Powell, expects Sydney’s median to hit $2 million by 2027, requiring an increase of only 14 per cent from current levels.

Brisbane Overtakes Melbourne

Brisbane has overtaken Melbourne to become Australia’s second-most expensive capital city. The Queensland capital recorded its eleventh consecutive quarter of price growth, pushing its median house price to $1.1 million. Economists attribute Brisbane’s continued momentum to low housing supply and strong population growth. Demand from interstate movers, international students and residents relocating closer to the city has strengthened its position as one of the country’s top-performing markets.

Melbourne is also regaining momentum, with its median house price lifting to $1.083 million, its highest level in three and a half years. The city is now within $10,000 of surpassing its previous market peak from late 2021. Perth is following a similar trajectory, sitting less than $19,000 away from a $1 million median and expected to cross that threshold before the end of the year.

Canberra and Hobart both reached their highest values since 2022, with Canberra’s median at $1.1 million and Hobart’s rising 4.7 per cent to $744,926. Adelaide also continues to perform strongly, climbing to $1.049 million after breaking into the million-dollar club earlier this year. Darwin recorded the steepest quarterly increase among all capitals, up 5.3 per cent to $656,858, its highest level in nearly a decade.

Interest Rate Cuts and Low Supply Drive Growth

According to Domain’s Dr Powell, several forces are fuelling the current price surge. Three Reserve Bank interest-rate cuts during the year have boosted borrowing power and confidence, while housing stock remains extremely limited. Auction clearance rates are at their strongest level in more than two years, and the expansion of the federal government’s 5 Per Cent Deposit Scheme is drawing more first-home buyers into the market.

Unit Prices Catch Up as Buyers Seek Affordability

Unit prices are also climbing in almost every capital city, with only Canberra showing a small decline. In Brisbane, Adelaide, Perth and Darwin, unit values are now increasing faster than houses, as affordability constraints push more buyers toward the apartment sector. Darwin led the country for unit growth in the September quarter, with a 6.5 per cent rise lifting its median to $388,504—an eight-year high.

Australia’s property market has entered another strong phase, characterised by limited supply, renewed confidence and widening affordability gaps between houses and units. Analysts expect growth to continue through the final quarter of 2025, although affordability pressures may begin to slow the pace in 2026.