Australia’s housing market is regaining momentum, with national dwelling values rising for the fifth consecutive month in June.
According to the latest Cotality Home Value Index, the 0.6% increase represents the strongest monthly growth in a year, further reinforcing a shift in sentiment that began earlier in 2025.
The turnaround follows a brief decline between November and January and has now extended into a broader quarterly trend.
Home values rose 1.4% over the June quarter, building on the 0.9% increase seen in Q1. The recovery has been widespread, with nearly all capital cities and regional areas recording gains — Hobart and Regional Tasmania were the only exceptions.
According to Cotality research director Tim Lawless, falling interest rates have been the key driver behind this rebound.
“The first rate cut in February was a clear turning point,” he noted. “An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher.”
Recovery Context: Momentum, But Still Below Peak Growth Cycles
While the direction of travel is upward, the pace of growth remains measured. The current quarterly growth rate is far below the 3.3% peak recorded in mid-2023, and a fraction of the 8.1% quarterly surge seen during the height of the pandemic. Still, the return to positive territory marks a significant shift in market dynamics — especially in a year where cost-of-living pressures and affordability concerns remain front of mind.
Importantly, the rebound is happening despite relatively low transaction activity. Housing turnover is running at an annualised pace of 4.9%, just below the decade average of 5.1%. Meanwhile, advertised stock remains scarce, down 5.8% compared to a year ago and 16.7% below the five-year average. This tight supply is helping to support prices, even in the face of subdued sales volumes.
“Although demonstrated demand is tracking slightly below average, advertised supply is scarce, creating a more balanced market for buyers and sellers,” Lawless said.
Capital Cities Regaining Lead as Regional Growth Eases
Although regional Australia continues to post stronger quarterly growth overall (1.6% vs 1.4% for the capitals), the monthly data suggests capital city markets are regaining leadership, a trend expected to continue into the second half of the year.
Darwin led the capital city pack, with a 4.9% quarterly rise, including a 1.5% lift in June — enough to push values to a new record high, finally surpassing its 2014 peak. Perth and Brisbane followed, with quarterly growth of 2.1% and 2.0% respectively. These two markets have also led the five-year value trend, with Perth up 81.1% and Brisbane up 75.1% since June 2020.
Nationally, home values rose 3.4% over the financial year, but the acceleration in recent months points to stronger growth in the second half of the year. When quarterly growth is annualised, the implied national growth rate is 5.8%, slightly above the decade average of 5.2%.
What This Means for Borrowers and Investors
As interest rates fall and sentiment improves, many investors and borrowers are reassessing their positions. While the market is showing renewed strength, the upswing is likely to remain measured due to affordability constraints — particularly in the eastern capitals where price-to-income ratios remain elevated.
“Given the upside risk that housing values will accelerate further from here as interest rates reduce, the reality is we will likely see home values rise by more than [5.8%] over the coming 12 months,” said Lawless.
Still, the strength of this recovery will depend not only on interest rates, but also on policy settings, household income growth, and the trajectory of housing supply.
For now, the trend is clear: with falling rates, low inventory, and strengthening confidence, the housing market is on the move again — cautiously but decisively.
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