Australian property prices are accelerating again, as falling borrowing costs ignite strong bidding at auctions even as cost-of-living pressures weigh on households.
National home values rose by 1.4% over the June quarter, according to Cotality data, with every state capital city reporting gains.
The increase is nearly double the pace of wages growth over the same period, making Australian homeseven more unaffordablefor prospective buyers.
The robust price gains and high auction clearance rates also rub against government measures to ease housing pressures, amid threats of another price breakout due to limited supply.
Cotality’s research director, Tim Lawless, said Reserve Bank interest rate cuts had been a “clear catalyst” behind the buying momentum.
“The first rate cut in February was a clear turning point for housing value trends,” Lawless said.
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“An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher.”
The official cash rate, which informs borrowing costs, has fallen from 4.35% to 3.85% this year. Most economists expect the RBA willcut rates again next week.
After a short-lived price reprieve in some markets late last year, home prices are at peak levels in Sydney, Brisbane, Adelaide, Perth and Darwin.
Growth is accelerating in some of the country’s most expensive markets, with Sydney prices already up 1.9% in the first half of 2025.
An independent Sydney auctioneer, Clarence White, said buyers were back.
“Early this year you weren’t really seeing any auctions with eight, 10 or 15 registered bidders; we’ve started to have some of those now, and we’ve started to see bidding with a bit more confidence and a bit more gusto,” said White, of Menck White Auctioneers.
“As interest rates come down, buyer confidence is rising, borrowing capacity is going up, and people are starting to jump.”
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Melbourne prices have risen 1.8% this year as buying momentum erases some of last year’s falls.
Darwin has seen the strongest price growth of the capital cities, up 7.7% in the first six months of 2025, while Perth and Brisbane have slowed since 2025 but continue to outrace the south-eastern cities with rises of 2.1% and 3.2% over the same period.
“We’re listing property, and they are turning over quite quickly,” said Nadija Begovich, a Perth real estate agent.“The panic frenzy buying has sort of dissipated … but we are still seeing good numbers at home opens, and from [guide prices] up to $1m you’ve got loads of people.”
Registered buyer interest in Brisbane has leapt by more than a third since April, according to Gavin Croft, the chief auctioneer at Ray White Queensland.
He said one townhouse in Brisbane’s outer south that had sold for $745,000 at the start of 2025 was resold for $885,000 in June after just one week of an auction campaign attracted 17 bidder registrations.
While affordability constraints had been expected to keep a lid on Australian home prices in 2025, insufficient levels of new supply are pushing prices higher, according to Cotality.
The federal government has promised to work with state governments to support the construction of 1.2m homes, and 55,000 social and affordable homes, by June 2029.
The Property Council of Australia chief executive, Mike Zorbas, said on Tuesday that Australia was projected to be 262,000 homes behind the 2029 target.
“While the number of new homes being built is not where we’d like it to be, the welcome 1.2 million new homes target is driving supply side thinking that has played second fiddle to policies that boost demand since the turn of the century,” Zorbas said.