The Australian Property Market: A 2025 Snapshot

Overview of the Australian Property Market (October 2025)

The Australian property market is experiencing fragmented but resilient growth, with national dwelling values up 4.8% over the past year. The total value of residential real estate has reached a record $11.8 trillion, an increase of $678 billion in 12 months. If current trends persist, the market could surpass $12 trillion by year-end.

Key Trends and Developments

The market is highly fragmented, with significant variations between capital cities. Perth (17.6%), Adelaide (12.1%), and Brisbane (11.0%) are leading the annual growth, while Melbourne's values have remained stable or slightly decreased. Darwin has seen a surge in prices since the first 2025 interest rate cut, with some suburbs up by 20.1%. In contrast, Sydney and Melbourne have seen declines in high-density, inner-city areas.

• Middle market: Dwellings valued between $648,000 and $1.2 million are seeing the strongest growth, with a 2.5% quarterly increase nationally.

• Lower quartile: Also robust, up 2.4% quarter-on-quarter.

Market Forecast

For 2025, house prices are forecast to rise by 4.9%, with units up by 4.5%, driven by rate cuts and renewed buyer confidence. In 2026, growth is expected to moderate to 4.5% for houses and 5.1% for units as supply improves and population growth normalizes.

Conclusion

The Australian property market remains resilient but uneven. Mid-sized capitals and affordable regions are outperforming, while Sydney and Melbourne’s inner-city markets face headwinds. Low supply, strong investor activity, and evolving lending practices are key drivers, while anticipated further rate cuts could sustain momentum into 2026.