A few months ago, the Australian housing market was in the throes of a boom. The typical price of a home has now crossed the very big $1 million threshold. The national average home price as of last month is $1,002,500. Exacerbating this figure is the state of the overall economy and ever-evolving market conditions. What’s different? The recovery has largely been underpinned by lower interest rates, which have spurred would-be buyers and investors, even as affordability continues to pose a challenge.
Currently in New South Wales, the average residential dwelling reaches around $1,245,900. In the meantime, Queensland’s average is $944,700 and the Australian Capital Territory averages $941,300. By complete contrast, the Northern Territory has the lowest average house price in the country at $517,700. As the market evolves, Sydney remains a focal point with its median house price hitting an astounding $1.83 million, equating to nearly 27 years of net income for the average household.
Price Trends Across Regions
The newest data paints an uneven picture across Australia’s big cities. Sydney’s eye watering median price would be a good example to use to demonstrate the massive financial hurdles home buyers face in our biggest city. The city’s real estate market has long been one of the most expensive in the world. Underneath today’s high prices—now exceeding Seattle—current trends point to a demand that still vastly outstrips supply.
Melbourne will be the only city among the capitals to see a fall in house prices. In the last year, that’s down 0.7%. This real estate downturn stands in stark contrast to what’s happening in other areas where prices are still skyrocketing. In Brisbane, house prices have increased by 6.8% in only one year. In the meantime, Perth and Adelaide have experienced even greater increases, with prices surging 7.5% and 8.1%, respectively.
Analysts forecast that house prices in capital cities are expected to rise by an average of 6% over the next year as demand remains strong. The years long climbing pattern in nearly every market is a testament to a strong rebound after the last reality check.
Factors Driving Market Recovery
Two major forces have brought about the perfect storm that is the current Australian housing market. The main driver is the persistent drop in interest rates which has made it easier to borrow for would-be homebuyers. This supply and demand constrained environment has offered a unique disparity to hot markets and heavily in-demand regions.
Tim Lawless, executive research director of CoreLogic’s Asia–Pacific research division, commented on these developments:
“The continued momentum we’re seeing across almost all markets is no doubt being fuelled by rate cuts – both those that have already happened, but also potential cuts in the coming months.”
Despite this encouraging momentum, challenges persist. Like the current Australian housing market, it often faced structurally inadequate supply and growing affordability burdens. Combined, these issues erect high barriers for the many prospective buyers who cannot afford to jump over the quickly rising costs.
The Value of Residential Dwellings
Significantly, by the end of the first quarter of 2025, Australia’s residential dwellings had more than doubled in value. They ended up setting a truly remarkable record of $11,366 billion. This figure speaks to both the increased competition for real estate assets and the growth opportunity across the sector.
The gap among metro areas underscores stark differences in housing market accessibility across the country. Major cities and even secondary appropriate metropolitan areas such as Sydney and Brisbane are experiencing double digit increases. Yet, other areas likely will not see a reversal of this trend due to different local economic conditions and market supply limitations.
Even with the pressures of affordability and concerns over supply, the Australian housing market seems set for more positive growth. As interest rates remain low and buyer demand persists, many analysts believe that this recovery phase will sustain itself in the coming months.