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Australia’s Housing Market Hits Record Highs in May 2025

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Business Honor
03 June, 2025

In May 2025, Australia's housing market reached its highest points ever thanks to gains in capital cities and falling interest rates.

Australia’s property market soared to record levels in May 2025, continuing a five-month streak of growth. National home values increased by 0.39 per cent in May, with prices up 4.12 per cent over the last 12 months, PropTrack's most recent Home Price Index revealed.

Capital cities spearheaded the advances, with a total monthly gain of 0.45 per cent. Sydney, Brisbane, Adelaide, Perth, and Darwin all hit new price highs, an indication of high demand and low supply in major urban centres. Melbourne, which had so far been trailing, experienced the highest growth at 0.79 per cent—although its house values are still 2.85 per cent off their peak.

Perth's median home value has risen to $787,000, surpassing Melbourne's for the first time in over a decade, indicating a steady performance compared to Melbourne's slower recovery.

Adelaide headed the capital cities in yearly growth with an 11.04 per cent increase, followed by Perth (8.40 per cent) and Brisbane (8.38 per cent). Regional markets were also strong, with home values increasing 0.25 per cent in May and 5.19 per cent during the year—gaining on the combined capitals' yearly growth of 3.71 per cent.

REA Group senior economist Eleanor Creagh said the increase was due to declining interest rates, which have lifted buyer sentiment and borrowing capacity. She added that while affordability issues continue to challenge the market, population growth, supply shortages, and incentives for buyers will keep pushing prices higher.

The Australian housing market will continue to expand for the remainder of 2025 due to further rate cuts and robust demand.