Price Trend Line = Houses v Units 

The graphs above represent a trend line of the median price performance at capital city level. Source = Cotality.  Note the above graphs don’t represent ‘prices’ but show ‘price changes’ over time.

Houses – Darwin led house price growth for the final month of 2025, recording a strong 2.1 percent monthly increase. Adelaide and Perth followed closely, each posting solid gains of 1.9 percent, while Brisbane continued its upward momentum with a 1.5 percent rise. Hobart recorded a moderate increase of 1.1 percent and Canberra edged higher by 0.5 percent. In contrast, conditions were softer across the two largest markets, with Sydney and Melbourne recording slight monthly declines of 0.3 percent and 0.1 percent respectively. The results reinforce the ongoing divergence between stronger-performing smaller capitals and more subdued conditions in Sydney and Melbourne, as affordability pressures and buyer selectivity continue to influence market outcomes early in the year.  Remember though – December is an unusual month for sales activity so we wouldn’t rely on the December figures as a trend change.

Units – Adelaide led unit price growth in December with a solid 2.0 percent monthly increase, closely followed by Perth at 1.9 percent and Brisbane at 1.8 percent. Darwin also recorded positive momentum, rising by 0.8 percent, while Sydney posted a modest gain of 0.3 percent. Conditions were weaker in several markets, with Melbourne and Hobart both slipping by 0.1 percent and Canberra recording a larger decline of 0.6 percent for the month. Overall, unit performance remained strongest across Brisbane, Adelaide and Perth, reinforcing the continued appeal of more affordable, higher-demand markets, while results across the southern capitals highlight a more selective and price-sensitive buyer environment at the start of the year.  The Melbourne, Canberra and Hobart markets are looking increasingly undesirable as buyers can purchase houses at much lower price points than apartments in these areas.

FORECAST - forecasts for 2026 prices have been the most positive I have ever seen – you can review my commentary on this in our Market Watch 2026 Forecast special (MarketWatch Ep 22).  Interest rate increases could pose a limitation, but generally there is still too much pent up demand and slow delivery of new properties so I expect we will see strong price increases in the coming months.

From an Outlook perspective as we move into 2026, we’re still facing exceptionally fast movement at the sub $1.5 million mark.  Good properties are still trading within a week unless they’re listed for auction.  The threat of an interest rate increase isn’t having an impact on this side of the market and, of course, with the most recent drop in the headline inflation rate there’s now more caution as to whether there will be an increase any time soon.  The global uncertainty caused by Trump’s action is fuelling the gold price, and if uncertainty continues we will see the upper end of the property market start to move again.  The upper end (at around $2.5M and upwards) was soft in the past three months, but this is will change if the global situation becomes more unstable because property in Australia is considered to be a safe haven. 

Rents - Houses v Units

Once again, please note the graphs below show ‘price changes’ not actual pricing [ eg – even though Darwin looks to be ‘on top’ this means it’s increasing faster than other locations, not that it’s more expensive.]  Overall rents look to be stabilising, with very minimal change over the past couple of months.  

Vacancy Rate

This data is drawn from SQM Research.  It represents the total vacancy rate in each major city.  A ‘healthy’ rate is around 2.5%. Anything below this means the amount of properties available for rent is not sufficient to meet the amount of people who want to rent in that particular area.  As you can see, all areas of Australia need more rental properties (all areas are under 2%), although supply is getting closer to healthier levels in Melbourne and Canberra. 

Employment 

Employment levels are an important indicator of economic health, and something the RBA monitors closely when deciding what to do with interest rates.  This information should also be monitored by property buyers as a leading indicator of locations to avoid or consider for their next purchase. 

The sweet spot for a good level of unemployment – where there’s enough jobs for those who want them - will hover between 4 and 5% depending on the rate of jobs turning over.

Anything below 4% would be considered to be low unemployment and would suggest a strong jobs market, attracting workers which increases demand for housing and pushes capital growth and rental returns upwards.

Anything in the 4.5% and upwards would reflect high unemployment which will indicate economic struggles, leading to weaker property price growth and eventually declines.

Population Growth 

This graph shows the change in population by State over the last reporting period.  The data includes changes caused by both overseas migration and also where Australians are moving from one state to the other.  Overall Australia had 306,000 migrant arrivals in 2024 -2025, a slight decrease over the previous 2023-2024 year of 400,000.

Building Approvals

The graphs below show the monthly dwellings approved in each State and Australia-wide, and also the percentage change.  In 2024, the Australian Federal Government announced a target of delivering 1,200,000 homes by 2029 and to achieve this we need to build 240,000 dwellings (houses and units) per year.  As you can see, we’re falling drastically behind on this target.

RBA Cash Rate (Interest Rate)

3.60%

Australian Dollar

1 AUD = 0.67 USD

Dwelling Values Trend Line

The graph above shows the price trend line for houses and units combined.  While this information is useful, it’s important to remember to look at pricing at suburb level and review pricing for your specific property type in order to identify opportunities and know what price to offer for your next purchase.

Looking at the combined data (houses + units) Perth and Adelaide jointly led dwelling price growth in December, each recording a strong 1.9 percent increase for the month. Brisbane and Darwin followed closely with solid rises of 1.6 percent, while Hobart posted a more moderate gain of 0.9 percent. Canberra edged higher by 0.2 percent. In contrast, conditions remained softer across the two largest capitals, with both Sydney and Melbourne recording slight monthly declines of 0.1 percent. Overall, the results continue to highlight the strength of the mid-sized capitals, where affordability and demand remain supportive, while Sydney and Melbourne showed more cautious buyer activity as 2025 drew to a close.  Once again, note that December purchase activity is unusual as December is often the month to purchase ‘bargains’, where sellers are keen to lock in their sale before Christmas.

Of course, in order to be successful, where you buy depends on your personal requirements as well as what’s happening in the market so book in for a Property Clarity Chat if you would like more tailored, personal recommendations.

If you’re looking for a more detailed review of the market, check out the information below.