Capital city house prices reach a new record

Scott Kuru April 21, 2025 4 min read

Image by Andy Brownbill

KEY POINTS

House prices in Australia's capital cities hit a record median of $1,178,668 in March 2025, with growth recorded for nine straight quarters, according to Domain
Unit prices showed a more varied picture - declining in cities like Melbourne and Canberra but rising in Brisbane, Hobart and Sydney
Domain sees moderate price support from rate cuts, strong jobs, and rising incomes, but warns that affordability, cautious lending, and global uncertainty could limit growth

A new property report says Australian capital city house prices have increased for the ninth straight quarter to reach a new record of $1,178,668.

The latest quarterly Domain House Price Report finds houses in Sydney and Melbourne in particular have performed strongly in the early months of 2025, while the picture is mixed in capital city unit markets.

The details

Domain Group’s March 2025 Quarterly House Price report finds that the company’s combined capital house prices measure rose for the ninth consecutive quarter.

That’s the longest stretch of continuous quarterly growth since 2012-15.

According to Domain, the median house price in an Australian capital city is now a record $1,178,668, up 0.7% on the previous quarter and 4.9% over the past 12 months.

Record house prices were recorded in Sydney ($1,691,731, up 4.0% year-on-year), Adelaide ($1,000,202, up 12.1% year-on-year) and Perth ($917,706, up 14.1% year-on-year).

However, Domain points out that price growth for houses has been slowing down, with gains halving compared to the previous quarter.

Sydney and Melbourne - Australia’s two largest property markets - are notable exceptions.

Both cities have posted two consecutive quarters of house price increases.

“After a -0.3% dip in Sydney in the September 2024 quarter and a -3% decline in Melbourne in the nine months to September 2024, these back-to-back quarterly gains suggest more than a short-lived rebound, particularly as Sydney’s rate of growth is picking up speed,” Domain’s House Price Report says.

“Melbourne’s underperformance over the past five years has opened up opportunities for buyers, while improved market conditions in Sydney are reflected in annual buyer enquiries rising by 12% and 10%, respectively, in the March quarter (of 2025).”

Strong quarterly house price growth in Sydney has led to the largest price gap between property types on record in the Harbour City, with a median house now costing 105% more than a median unit ($823,467).

As for Melbourne, despite a strong performance over the last six months, house prices remain $57,200 (-5.2%) below the peak recorded in December 2021 and still have further to go before seeing a full recovery.

In contrast, Domain says Adelaide and Perth continue to record house price increases, “although the pace has noticeably moderated”.

Domain also says Brisbane - one of the cities which has seen recent exceptional price growth—saw house prices fall over the March quarter of 2025—the first price fall in just over two years.

Units

Domain says price growth for units is also slowing across the capital cities, with a number of cities seeing negative growth.

Melbourne (-3.2%), Perth (-0.9%), Canberra (-5.7%) and Darwin (-0.1%) all recorded quarterly price declines.

It was Perth’s first unit price drop in two years and Melbourne’s steepest.

Meanwhile, Domain says unit prices in Brisbane and Adelaide continued to rise, though their pace of growth has slowed.

Sydney and Hobart bucked the trend, with Sydney unit prices up 0.4% - the strongest quarterly gain since mid-2024, while Hobart units saw a large 6.6% quarterly leap, helping to claw back recent losses to record 0.8% gains over the past year.

Reflecting the Queensland capital’s severely undersupplied unit market, apartments in Brisbane put on another 2.1% in the March quarter to record an astonishing 16.2% year growth, reaching a new median price record of $657,645.

The Outlook

Looking ahead, Domain’s economic team says that “a gradual loosening of monetary policy, relief from rising living costs, growing household incomes, tight job markets and improved sentiment are expected to support the housing market.”

However, the data analytics firm believes several challenges could offset these “positive influences” and restrain future price growth.

Despite financial markets now pricing in between 4 and 5 rate cuts by the Reserve Bank of Australia over the next year, the Domain team expects the “rate-cutting cycle…to unfold slowly.”

It’s also uncertain about the effects on the property market of the global trade war unleashed by the Trump Administration.

“Uncertainty arising from the Trump administration’s economic and foreign policies may influence global markets and, in turn, the Reserve Bank of Australia’s decisions on the cash rate, further shaping how quickly housing values may rise.”

The firm also points out that “housing remains prohibitively expensive for many”, population growth from overseas migration is slowing and “cautious lending standards” by banks and regulators like APRA persist.

“Until home loan serviceability improves significantly, it is difficult to envision housing markets transitioning into a pronounced growth trend,” the report concludes.