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National dwelling values have increased in May to a new record high of $809,000, up for the fifth consecutive month, while prospective buyers re-enter the market and expedite their purchasing decisions.
New PropTrack price index showed that home values increased by 0.39 per cent across the country in May to a new peak of $809,000, marking a 4.12 per cent increase year on year and 50.1 per cent since March 2020.
REA Group senior economist, Eleanor Creagh, said that over the month, capital cities led the dwelling value growth with a 0.45 per cent increase to $877,000.
“With interest rates falling, price momentum has increased and broadened, with all capitals seeing prices lift in May,” Creagh said.
“Price growth across the capitals is starting to converge. Melbourne, which previously lagged the other capitals, is now seeing home price growth pick up.”
PropTrack data showed that Melbourne has been on the path of recovery, recording the highest monthly growth with a 0.79 per cent increase to a median dwelling of $782,000.
Although home prices are growing, Melbourne dwelling values remain 2.85 per cent below their peak and have dropped by 0.38 per cent since May 2024.
“Despite Melbourne leading monthly gains, Perth’s median home value of $787,000 has overtaken Melbourne’s at $782,000 for the first time in a decade,” Creagh said.
“This reflects Melbourne’s relative weakness compared to Perth’s persistent outperformance in recent years and affordability-driven demand.”
Creagh said that while Perth and Brisbane’s home growth has been steady, it has now started to moderate following years of strong performances.
In May, data showed that Perth dwellings rose by 0.79 per cent to $787,000, marking an 8.40 per cent yearly increase and 86.7 per cent growth since March 2020.
Similarly, Brisbane dwellings grew by 0.79 per cent to $889,000 in May, recording an 8.38 per cent year-on-year increase and 85.3 per cent growth since March 2020.
In Adelaide, dwelling values rose by 0.52 per cent in May to $805,000, marking the highest annual growth at 11.04 per cent.
Over the same period, Sydney’s dwellings recorded a 0.39 per cent price increase while Hobart saw a 0.30 per cent rise, Darwin grew by 0.27 and Canberra by 0.22 per cent.
“Although these markets continue to lead annually, momentum is increasing in Melbourne, Canberra and Hobart after lagging in 2024,” she said.
In regional areas, PropTrack data showed a 0.25 per cent growth in dwelling values, marking a 5.19 per cent year-on-year increase and a 65 per cent increase since March 2020.
Creagh said that while the May increase marked the fifth consecutive monthly increase, dwelling values are expected to increase further in the coming months.
“Lower interest rates have lifted borrowing capacities and boosted buyer demand. And with further price increases and rate cuts expected, prospective buyers are moving off the sidelines and accelerating their purchasing decisions,” Creagh said.
“Looking ahead, while stretched affordability will remain a constraint, a chronic lack of new housing supply, population growth, and targeted buyer incentives are expected to keep upward pressure on prices.”
“In combination with interest rates continuing to move lower, these factors are likely to drive further price growth throughout the remainder of 2025,” she concluded.
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