Australia’s eight state and territory capital cities posted simultaneous house price rises for the first time in four years last quarter as interest rate cuts underpinned a wave of buying.
After a brief reprieve in 2024, prices accelerated in Sydney and Melbourne while Australia’s smaller capitals retained momentum, according to June quarter data from property portal Domain.
“It doesn’t matter the capital city, it doesn’t matter the property type, prices are rising,” Domain’s chief of research and economics, Nicola Powell, said.
More than 1,700 suburbs around Australia saw house values rise over the year to June, with suburban Perth seeing some of the biggest jumps. About 400 suburbs saw prices fall over the year.
Prices picked up in every capital city across building types over the three months to June, the first time in four years for houses and the first time in two years for units.
Broad-based demand surges saw prices rise on an annual basis for both houses and units across most capital cities, excluding houses in Darwin, units in Melbourne and both types in Canberra.
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Demand jumped nationwide after the Reserve Bank’s two cuts to interest rates in 2025 increased borrowing capacity, which Cotality data indicated had pushed more bidders to auctions and driven clearance rates close to 70%.
Clearance rates refer to the percentage of properties sold at auction, compared with the total number of properties listed to go under the hammer.
Prospective buyers shared stories with Guardian Australia of trying to buy a house during a fast-rising market, with many repeatedly outbid.
While prices are still rising, buying momentum has eased in some overheated capitals, including Brisbane and Adelaide, after median prices surpassed $1m.
“That just locks out so many people from purchasing a house and it does shift demand towards units … because of the landscape of affordability,” Powell said.
“Some buyers have to seek more affordable alternatives, and units obviously present that.”
While Brisbane houses saw prices rise 7.5% in the year to June, apartment prices rose 13.3%. The three months to June saw apartment price growth outstrip house price hikes in Melbourne, Brisbane, Adelaide, Canberra and Darwin.
Apartment prices were starting to catch up to the pace of house prices as homebuyers and investors switched their focus towards relatively cheaper units, according to Chyi Lin Lee, professor of property at the University of New South Wales.
“What we’ve seen here is houses leading the units, so we can see the unit prices actually catching up,” Lee said.
He said interest in apartments had likely also risen as buyers looked to escape renting and investors seek to take advantage of the persistent surge in rental costs.
Cotality data released on Thursday indicated rents had leapt more than 40% since 2020, with median asking prices up nearly $200 per week, or more than $10,000 annually.
Rent hikes have since slowed to just 3.4% annually in the year to June, the weakest 12-month increase since 2021 and the equivalent of a $22 weekly increase on the median rent, Cotality found.
Property prices, though, are expected to continue to accelerate as the Reserve Bank cuts interest rates further, with a third cut expected when the RBA board meets in August.
Analysts have not forecast a property price boom given so many Australians have already been priced out of the market, with AMP predicting home prices will rise no more than 6% annually.
