New data reveals capital city housing markets to surge ahead of regions
Regional home prices have risen 6.6 per cent in the past year, ahead of capital cities, but new data reveals the tide of growth is turning as the capitals gain momentum.
Home price growth in regional Australia outpaced that of capital cities over the past year, but experts suggest this is about to change.
Housing researcher PropTrack’s Home Price Index for August revealed property values across the nation have steadily risen to reach record highs, with the 0.5 per cent lift last month adding about $47,900 to the value of the median home.
But while capital cities have recorded 4.9 per cent growth over the past 12 months, regional prices have increased by 6.6 per cent.
REA Group senior economist Eleanor Creagh said the rate of growth in regional areas experienced a jump in the second half of 2024, bolstered by affordability and lifestyle appeal.
However, the rate of growth between different markets is growing and changing, “with capital cities taking the lead in 2025”, she said.
“When we look at the past year, regional areas have outpaced the capital cities, but when we look at growth so far this year … we’re seeing that it’s capital city markets leading the home price upswing,” Ms Creagh said.
“Capital city markets also lead monthly growth in August relative to the regional areas.”
The change in market dynamics was evident in August, with home prices in capital cities up 0.5 per cent compared with growth of 0.3 per cent in the regions.
Among the capitals, Darwin and Sydney led monthly growth, with 0.8 per cent and 0.7 per cent respectively. Brisbane and Perth were only slightly behind with 0.6 per cent in growth, while Melbourne, Adelaide and Canberra recorded a 0.3 per cent lift.
Hobart was the only capital market to record a fall, down 0.5 per cent.
Ray White Group chief economist Nerida Conisbee said she also believed capital cities were primed to overtake regional areas.
“Where we have seen weakness in the market, particularly last year when we saw Sydney and Melbourne really dragging down the capital city average, they’re starting to recover,” Ms Conisbee said.
“The recovery will be felt clearly in Sydney and Melbourne, and that will really push up the major city average and will get it back to what we’re seeing in regional areas and probably beyond that.”
Ms Conisbee said she was expecting a “really strong” spring selling season and “continued acceleration” of prices in the final months of 2025.
“[The property market] is definitely re-accelerating and really being driven by those lower borrowing costs but also the things that drove prices when interest rates were high,” she said.
“We still have very high construction costs, we also have low levels of home supply and both of those factors are also driving prices up.”
Ms Creagh said this year’s spring selling season would likely “mark a turnaround” from the slower conditions some capital city markets experienced in 2024.
“It looks likely that housing markets around the country are poised for another leg higher, likely with momentum strengthening in previously lagging capitals like Sydney, Melbourne and Darwin,” Ms Creagh added.
More Coverage
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout