Australian Property Market Update

August 2025 | Foresight Property Research

Key Market Insights

National housing values continued upward momentum in July, rising 0.6% for the month and bringing quarterly growth to 1.8% - the strongest quarterly outcome since the three months ending June last year. Annual growth now stands at 3.7%, accelerating from 3.4% in June. Capital cities (1.8%) matched regional markets (1.7%) for quarterly growth, with Sydney and Brisbane maintaining record highs while Darwin achieved its first new peak in over 11 years.

Australia (Quarterly)

+1.8%

Combined Capitals (Quarterly)

+1.8%

Combined Regionals (Quarterly)

+1.7%

Rental Yield Combined Capitals

3.5%

Australia (Annual)

+3.7%

Combined Capitals (Annual)

+3.0%

Combined Regionals (Annual)

+5.9%

Rental Yield Combined Regionals

4.4%

Capital Cities Performance

Capital City 3-Month Growth Annual Growth Rental Growth (Annual) Gross Yield Market Status Key Characteristics
Sydney +1.8% +1.6% +1.8% 3.0% Record High Sustained premium market strength, accelerating momentum
Melbourne +1.2% +0.5% +1.2% 3.7% 3.4% below peak Recovery gaining pace, improved quarterly performance
Brisbane +2.3% +7.3% +3.8% 3.6% Record High Leading quarterly growth, strong interstate demand
Adelaide +1.5% +7.0% +4.7% 3.7% Record High Consistent performer, ongoing affordability appeal
Perth +2.6% +6.5% +4.9% 4.2% Record High Strong quarterly gains, mining sector support
Hobart +0.1% +1.9% +5.3% 4.4% 10.1% below peak Modest growth, rental market remains tight
Darwin +5.6% +8.5% +6.2% 6.4% Record High New peak achieved, strongest quarterly growth nationally
Canberra +1.3% +0.5% +1.6% 4.1% 5.1% below peak Gradual improvement, government sector stability

Regional Markets Performance

Regional Market 3-Month Growth Annual Growth Rental Growth (Annual) Gross Yield Market Characteristics
Regional NSW +0.9% +3.7% +4.6% 4.1% Stable growth trajectory, coastal markets resilient
Regional Victoria +1.4% +1.9% +4.2% 4.3% Improving conditions, tree-change demand rising
Regional Queensland +2.5% +8.4% +5.6% 4.4% Mining regions leading growth, strong fundamentals
Regional South Australia +2.0% +11.2% +5.7% 4.6% Exceptional performance continues, wine regions strong
Regional Western Australia +2.6% +12.0% +10.3% 5.9% Leading annual growth, mining sector driving demand
Regional Tasmania -1.0% +2.4% +2.7% 4.6% Soft quarterly conditions, tourism sector recovery
Regional Northern Territory +1.0% -1.9% +4.1% 7.6% Volatile market, high yields offsetting value decline

Regional Market Insights

Regional WA maintains leadership with 12.0% annual growth, driven by continued mining sector strength and acute supply shortages in resource communities.
Regional SA delivers strong quarterly growth of 2.0%, with annual growth reaching 11.2% as lifestyle migration accelerates to wine regions.
Regional Queensland posts solid quarterly gains of 2.5%, with mining-dependent areas continuing to attract investment and population growth.
Regional Victoria shows improving quarterly momentum as Melbourne's recovery supports broader state sentiment and tree-change demand.
Quarterly Growth by Capital City
Darwin
5.6%
Perth
2.6%
Brisbane
2.3%
Sydney
1.8%
Adelaide
1.5%
Canberra
1.3%
Melbourne
1.2%
Hobart
0.1%
Annual Growth by Capital City
Darwin
8.5%
Brisbane
7.3%
Adelaide
7.0%
Perth
6.5%
Hobart
1.9%
Sydney
1.6%
Canberra
0.5%
Melbourne
0.5%

Major Market Drivers

Growth Drivers

Interest Rate Environment: RBA cash rate maintained at 3.85% in July, with market expectations for cuts to low 3% range supporting buyer sentiment and affordability.
Supply Shortage: New listings remain 11.7% below previous year levels, creating persistent supply-demand imbalance across most markets.
Interstate Migration: Continued population flows favouring Brisbane, Perth, and Adelaide, driving sustained demand in these growth markets.
Auction Performance: Capital city clearance rates averaging 64.8%, above decade average, indicating solid buyer competition.

Market Headwinds

Affordability Constraints: Record high values in Sydney and Brisbane limiting buyer pools, with median prices continuing to rise.
Construction Challenges: Dwelling approvals remain 23.9% below national housing accord targets despite recent improvements in building activity.
Market Timing: Days on market rising to 35 days nationally, suggesting longer sales processes and more measured buyer behaviour.
Global Uncertainty: Ongoing geopolitical tensions and policy uncertainty creating cautious lending and investment environment.

Rental Market Trends

Continued Moderation: National rental growth easing further, with quarterly increases moderating though annual growth maintains at 3.7% nationally.
Regional Outperformance: Regional rental growth (5.9%) significantly exceeding capitals (3.0%), reflecting ongoing affordability-driven migration patterns.
Yield Compression Signals: Gross yields holding at 3.7% nationally, though accelerating value growth may soon pressure yields lower.
Market Divergence: Darwin recording highest yields at 6.4%, while Sydney maintains lowest at 3.0% despite premium market positioning.

Market Outlook

Momentum Building: With quarterly growth accelerating to 1.8% and monthly gains holding steady at 0.6%, the growth cycle appears to be gaining momentum through the second half of 2025. Further RBA rate cuts expected to support continued buyer activity.

Regional Strength Continues: Regional markets maintaining strong fundamentals, particularly in WA and SA, supported by resource sector activity and lifestyle migration trends from major cities.

Capital City Divergence: Sydney and Brisbane at record highs with accelerating momentum, while Melbourne's recovery strengthens. Darwin's achievement of new peak values after 11 years highlights improving market conditions.

Supply Constraints Persist: With 44.8% of suburbs nationally at peak values and total listings 16.7% below five-year averages, supply shortages likely to continue supporting price appreciation across most markets into spring selling season.

Data sourced from Cotality Monthly Housing Chart Pack August 2025 • This report provides general market information and should not be considered as financial advice