Perth, Brisbane propel national property prices to fastest gains in over a year

The Australian property market is seemingly irrepressible.

In the face of affordability constraints that have seen the Australia’s property market become the sixth most expensive in the world, August delivered the fastest pace of real estate price growth since May 2024.

Cotality’s national Home Value Index (HVI) rose 0.7 per cent over the past month, on the back of muted listings of homes for sale. Advertised supply levels remain about 20 per cent below average for this time of the year.

Sellers are licking their lips as the market heads into the spring selling season, a time of year when prices already get a boost as buyers emerge from their winter cocoons.

It’s again the mid-sized capitals where these buyers have been focusing their attention.

Brisbane (up 1.2 per cent for August/3.0 per cent for the quarter) and Perth (1.1 per cent/3.1er cent) recorded the highest monthly gains. Adelaide (0.9 per cent/2.1 per cent) wasn’t far behind with a 0.9 per cent lift in values. Darwin has also recorded solid gains, with a 1.0 per cent rise in August, taking values 10.8 per cent higher through the first eight months of the year, by far the highest year-to-date gain across the capital cities.

Research Director for Cotality, Tim Lawless, said there was once again a clear mismatch between available supply and demonstrated demand that was placing upwards pressure on housing values.

“We are starting to see the usual start of spring upswing in new listings coming to market, but from a low base,” Mr Lawless said.

“A pick up in the flow of stock coming to market through spring will be good news for buyers who generally have limited choice at the moment.”

Despite the gathering momentum in the market, he remained confident that a return to the pandemic-era boom in prices was unlikely.

Interest rates are falling but the official cash rate of 3.6 per cent is still vastly higher than the emergency rate of 0.1 per cent that kept mortgage rates to sublimely low levels.

The pace of growth remains modest relative to recent upswings.

During the pandemic, according to Cotality, the monthly change in the national index peaked at 3.1 per cent in March 2021, and the upswing commencing in early 2023 climbed quite rapidly, reaching a 1.3 per cent high in May 2023.

“I would be surprised if we saw the monthly rate of change in the national HVI getting anywhere near these earlier cyclical peaks, given how stretched housing affordability has become,” Mr. Lawless said.

“What is more likely is that home values will rise at a more sustainable pace, with demand dampened by affordability constraints, more normal rates of population growth and cautious lending policy.”

Over the past five years the combined capital cities have seen property prices rise 42.1 per cent, but regional markets have propelled upwards even faster, at a fraction under 60 per cent.

But there’s been a turnaround of late, with the capitals again delivering higher capital growth than the regions. New South Wales and Tasmania (up 0.2 per cent for August) were the laggards, behind the likes of Western Australian regional (1.0 per cent) and Queensland (0.8 per cent)

Over the half decade, Perth and regional Western Australia have been the standout property markets, up 81.9 and 86.9 per cent respectively.

Perth’s property prices are generally forecast to continue rising, driven by strong population growth, high incomes, and relative affordability compared to other major Australian cities. The median house price is expected to exceed $1 million by late 2026.

While there are expectations that affordability pressures will keep a lid on a market explosion, Western Australians are relatively well off. The state is leading Australia in terms of both income and wealth, with $133,224 and $952,500 respectively, which is well above the average household annual gross income of $107,276 and average household net worth of $809,900.

Julie Kelley, Global Sales and Marketing Manager for aussieproperty.com, said the most competitive segment of the Perth market was inner suburban unit stock.

“For homes below $1 million, especially in that $700,000 to $900,000 range, it is a fiercely competitive space in which to be buying.

“Interstate investors are not as prominent as they were two to three years ago but locals are very active in the market.

“Home opens in that price range have large numbers of first home buyers, many with grandparents or parents who are helping them get a foot on the property ladder,” Ms Kelley said.

“Those buyers were focused on one- and two-bed, one-bath townhouses, villas and apartments, and north of the (Swan) river were most competitive in Tuart Hill, Yokine, Scarborough and Innaloo, while south of the river it was suburbs such as South Perth, Como and Bicton where quality stock was in hot demand.”

Perth on Tuesday (1 September) also recorded its lowest ever listings for sale, with just 2,981 properties for sale. Fifty-five suburbs had just one property for sale. 

When it comes to expectations of a continued upwards trajectory in prices, it was a similar picture in Brisbane.

Outer Brisbane may be about to launch

Demand continues to outpace supply, driven by interstate migration and low housing stock.

Led by the inner and middle ring suburbs, huge infrastructure spending and the build-up towards the 2032 Brisbane Olympics have delivered capital growth above 50 per cent since the onset of Covid, ahead of most capital cities.

The most recent PropTrack data shows the median home price in Brisbane increased by 9 per cent to $919,000 in the year to July.  

Brisbane apartments are very extremely well too, up 10.6 per cent year-on year and 1.1 per cent over the past month.

Simon Clarke, Director, Setlr, argued that Brisbane property prices had not peaked yet.

“Even though prices have moved sharply in recent years, particularly this year, Brisbane still offers strong relative value compared to Sydney and Melbourne but I don’t believe we’ve hit a ceiling just yet.

“In the entry level market, more buyers are compromising, either shifting from a house to a townhouse or unit in the inner city, or moving further out from 10km to 25 or 30km from the CBD and, even then, these options remain more affordable than equivalent choices in Sydney or Melbourne.”

He added that it was locals driving the market rather than interstate buyers, and offered his view on which market segment and suburbs might be about to rise the fastest.

“It’s the entry-level market where we’ll see the greatest rise,” he told API Magazine.

“This space is incredibly competitive, particularly with the new first-home buyer incentives in play.

“Demand at these price points is putting upward pressure on well-located units and townhouses in the inner-city ring — in suburbs like Camp Hill, Morningside, Coorparoo, Clayfield — as well as affordable houses in suburbs around 30km from the CBD.

Rent price resurgence

Renters who thought the worst was over might be shuddering at the sight of the latest data.

National rental growth picked up to 0.5 per cent in seasonally adjusted terms through August, the largest month-on-month rise since May last year.

The re-acceleration in rental growth has been apparent through most of 2025, with the annual change now rising over two consecutive months, reaching 4.1 per cent in August, according to Cotality.

Rental markets remain extremely tight across most regions, with the national vacancy rate at 1.5 per cent in August which is around record lows. The five years prior to 2020 recorded an average vacancy rate of 3.3 per cent, more than double the current level.

Melbourne, the ACT and Sydney are recording the softest rental conditions, with annual rents rising by the least amount of any capital city over the past 12 months; however, the trend looks to be picking up in these cities also.

“The reacceleration in market rents is one to watch considering the large weight allocated to rental prices in the CPI,” Mr Lawless said.

“There is more than a year of lag between rental value estimates and CPI rents paid, but if this uptick in rental growth continues it could gradually place some upwards pressure on inflation.”