Analysis of real estate data confirms that asset values are currently rising in almost every location across Australia.
Whilst interest rates are much higher now than 3-years ago, real estate activity accelerated once buyers gained confidence that the rate rise cycle had run its course.
In this property market research report, Propertyology uses the statistical evidence of a few key metrics to illustrate that different capital cities and regional cities in a variety of states continue to perform quite differently.
The macro picture
In a broad general sense, conditions remain rock solid.
Very strong rates of employment, rising wages, healthy levels of household equity, a lower than normal volume of properties listed for sale (and for rent) and restrictions in the construction sector is a recipe for capital growth.
At its meeting on 19 May, the RBA reduced the cash rate for the second time out of three meetings held so far in the 2025 calendar year.
And, with global inflation seemingly under control, it is highly probable that multiple more interest rate cuts will be announced over the remaining five (5) meetings this year.
Property market performance is not the RBA’s responsibility. Their primary focus is Australia’s economic stability.
That said, 7 out of every 10 households nationally are owner-occupied…
Make no mistake, the RBA Board are acutely aware that Australia’s economic performance is deeply wedded to the strength of household balance sheets, household budgets, general sentiment, construction sector activity and the now $100 billion in state / federal government annual revenue through property taxes.
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Sentiment
The performance of each city’s local economy followed by housing supply volumes have the biggest influence on property markets.
Interest rates have significantly less influence on property market performance.
Contrary to repeated fearmongering from a big bunch of amateurs disguised as ‘property market analysts’, borrowers did not fall off the so-called ‘mortgage cliff’.
In fact, the national home loan arrears rate remained at circa 1 percent of all mortgages and, despite a sharp increase in the Cash Rate (from 0.1 percent at the beginning of May 2022 to a peak of 4.35 percent in November 2023), many locations across Australia produced boom rates of house value growth during the 2024 calendar year.
The impact of RBA Cash Rate fluctuations (up or down) tends to be reflected most in general household sentiment and in landlord’s cash flows.
Whilst the RBA delivered one last rate increase in November 2023, the record books confirm that it had practically finished its work by mid-2023.
And it is no coincidence that buyer sentiment accelerated from that point onwards.
Varying rates of growth across Australia
The 18-month period of sharp rising interest rates delivered a big jolt to national sentiment.
But the property market of each city responded very differently because various other more influential factors presented differently from one city to another city.
Brisbane QLD
For our first example, while the RBA implemented its steepest ever increase Brisbane’s median house value declined sharply (14 percent, from June 2022 to February 2023).
As soon as the consensus felt the Cash Rate was near its peak, buyers re-engaged with the solid local fundamentals.
The 26-months of March 2023 to May 2025 produced an incredible 38 percent capital growth.
Canberra ACT
Australia’s 5th largest capital city, Canberra, produced a very different response.
With an economic climate that currently requires government spending to be curtailed, local buyer confidence must be affected when one third of its workforce is employed by governments.
And the supply of properties for sale in Canberra remains at a more elevated level than most other cities – up towards the high levels of Canberra’s 2019 property market downturn.
Sydney NSW
With the highest mortgages of any Australian city, Sydney’s property market has always been more sensitive to RBA’s attitude than other cities.
Buyer activity in Sydney (the blue line in the next graphic) responded positively to the RBA’s relaxation.
There has been a 4 percent increase in Sydney house sales volumes (demand) over the last 12-months.
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Influenced by local economic conditions which remain softer in Sydney than elsewhere in Australia and above-average mortgage balances to service, the total volume of properties listed for sale across Greater-Sydney has been consistently increasing (currently 10 percent more properties available than a year ago).
Bendigo VIC
The ‘jaws’ of the blue and green line in the far-right hand side of this next graphic is a great example of a city with a rock-solid economy rediscovering real estate sentiment and rebounding strongly.
By using statistical evidence instead of guesswork, the property data confirms real estate transaction volumes (buyer activity) has consistently been on the rise in Bendigo since mid-2024.
Total house sales volumes (demand) over the 12-months to March 2025 exceeded the 2,000-threshold, a lofty level for Australia’s 20th largest city.
After a reduction in asset values during the RBA rate increase cycle, CoreLogic data suggests that median house values are now growing at an annualised rate of circa 6 percent. And the ‘jaws’ appear to be widening.
The evidence confirms a 25 percent increase in sales volumes (demand) over the last 12-months.
And local real estate agents are backing up the statistics by confirming they’ve experienced more competition for properties, quicker selling time and offers from multiple parties.
Geraldton WA
Over in the west, Geraldton’s property market barely broke stride while the RBA was doing all of that heavy lifting.
One of the best-performed property markets in all of Australia over the last 5-years, real estate in Geraldton is still among this country’s most affordable.
Statistical evidence confirms housing supply volumes now at its lowest level ever, while demand from both owner-occupiers and property investors is incredibly strong.
Solid-brick duplexes in Geraldton are currently available from $300,000+.
Townsville QLD
In attempt to provide examples of property market conditions from geographically contrasting parts of the sixth (6th) largest country in the world, this last graphic relates to Australia’s northern capital, Townsville.
Property market conditions are currently so strong that Townsville’s median house price increased by 27 percent over the last 12-months.
Townsville’s rental vacancy rate has now been below 2 percent for 5-consecutive years (and only 0.5 percent in May 2025).
With the strongest economy of any city in Australia over the last few years and an amazing collection of major projects still in the pipeline, the only thing that is currently limiting the volume of buyers from continuing to break new record highs is that there is very little housing supply available.
What’s ahead?
In a broad sense, I’m anticipating some gradual softening of national economic conditions, although employment levels will remain very high and the skilled labour shortage will still be significant.
Over the last few years, an estimated 85 percent of existing landlords have been required to absorb cash flow losses of between $5,000 and $50,000 per year.
All mortgage holders are likely to benefit from further cuts to the RBA Cash Rate and the resultant reduction in minimum loan payment requirements.
Many will also enjoy further wage increases.
It will be interesting to see how much longer we all have to wait for APRA to eventually do the right thing and reduce the (overzealous) debt servicing buffer from the current level of 3 percent to a more sensible level of 2 percent.
Regardless, don’t expect the property market pressure to ease any time soon.
With 2 million more people than this time 5-years ago, the current volume of properties listed for sale across Australia is 15 percent less than back then.
Housing will never go out of fashion.
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