For the first time in four years, all eight Australian capital cities have posted simultaneous house price increases. According to data released for the June quarter, interest rate cuts in 2025 have sparked a wave of demand that has propelled house prices higher nationwide.
This surge follows a brief lull in 2024, where the housing market saw some stability, but now, cities like Sydney and Melbourne have seen acceleration in house prices. Smaller capitals have also retained momentum, driving the nationwide trend.
Record Price Rises Across Capital Cities
In an unprecedented trend, the price of homes in every Australian capital city rose during the three months leading to June.
This is the first time in four years that house prices have seen an uplift across all cities simultaneously, marking a significant shift in the Australian housing market. According to Domain, over 1,700 suburbs across the country witnessed an increase in house values, with suburban Perth leading the pack in terms of price growth.
The price increases affected all property types, including both houses and units. Notably, apartment prices have outpaced house prices in some capitals, such as Melbourne, Brisbane, Adelaide, and Canberra.
Nicola Powell, Domain’s Chief of Research and Economics, pointed out that the ongoing rise in demand has led to a broad-based surge in house prices across Australia. As Powell stated, “It doesn’t matter the capital city, it doesn’t matter the property type, prices are rising.”
Although prices have climbed, the growth rate of certain capitals, such as Brisbane and Adelaide, has started to slow. This is due in part to house prices surpassing the $1 million mark, making it more challenging for many buyers to enter the market.
Interest Rate Cuts Drive Demand
The catalyst for the current market boom is largely attributed to the Reserve Bank of Australia’s (RBA) decision to cut interest rates twice in 2025. The rate cuts have improved borrowing capacity, driving a wave of demand, especially from those seeking to capitalise on the relative affordability of units compared to houses.
According to Cotality data, the reduction in borrowing costs has increased competition in auctions, with clearance rates reaching close to 70%. This, in turn, has pushed more bidders into the market, further fueling the price rises.
While demand continues to surge, Powell notes that the high cost of homes in major cities has led some buyers to shift their focus to apartments. Experts like Chyi Lin Lee, Professor of Property at the University of New South Wales, have noted that this shift has resulted in unit prices catching up to house prices in many capitals.
