New data from REA Group’s PropTrack shows that home prices hit a new national record in May 2025, fuelled by interest rate cuts from the Reserve Bank of Australia in February and May, with Melbourne leading the charge.
The Victorian capital saw prices shoot up by 0.79% in May, the fastest growth in any of the 15 major capital cities and rest-of-state regions that PropTrack measures each month.
It’s a sharp turnaround for Melbourne, where prices are still 2.85% below the city’s record high.
Nationally, PropTrack says prices grew 0.39% in May, the fifth consecutive month of growth and are up 4.12% year-on-year, with the median Australian home now valued at $809,000.
PropTrack’s latest Home Price Index also identifies the areas of Australia which have seen the fastest price growth over the past 12 months, with the Queensland cities of Townsville, Rockhampton and Gladstone and parts of suburban Adelaide leading the way.
The details
PropTrack says Australia’s capital city housing markets led home price gains during May 2025, rising 0.45%.
All capitals saw price rises, and Sydney, Brisbane, Adelaide, Perth and Darwin are all now at price peaks.
“With interest rates falling, price momentum has increased and broadened, with all capitals seeing prices lift in May,” says Eleanor Creagh, Senior Economist with REA Group.
“The growth seen in all capital cities is underpinned by improved buyer sentiment and renewed confidence following interest rate cuts.
“Lower interest rates have lifted borrowing capacities and boosted buyer demand,” Ms Creagh says, “And with further price increases and rate cuts expected, prospective buyers are moving off the sidelines and accelerating their purchasing decisions.”
Melbourne saw the strongest monthly rise (+0.79%), continuing its recovery after a prolonged period of softer growth.
Despite Melbourne's big monthly gains, Eleanor Creagh points out that Perth’s median home value of $787,000 has overtaken Melbourne’s ($782,000) for the first time in a decade.
“This reflects Melbourne’s relative weakness compared to Perth’s persistent outperformance in recent years and affordability-driven demand,” she says.
However, the REA Group Senior Economist says that price growth across the capitals “is starting to converge.”
“Melbourne, which previously lagged the other capitals, is now seeing home price growth pick up,” while “cities such as Perth and Brisbane are now seeing growth moderate after strong outperformance.”
Eleanor Creagh says price momentum is also picking up in Canberra and Hobart, “after lagging in 2024.”
Looking back over the last year, Adelaide was the standout capital city performer, chalking up price growth of 11.04%, followed by Perth (+8.40%) and Brisbane (+8.38%).
Strong regions
PropTrack’s combined regionals price measure rose 0.25% in May 2025, with annual growth of 5.19% outpacing the combined capitals (+3.71%).
Regional prices are now 65% higher than their levels five years ago.
The PropTrack data also shows clearly how affordable markets, including some in regional Australia, have seen extremely strong growth.
Eleanor Creagh says buyers constrained by a combination of high interest rates and rapidly rising property prices have sought out these more affordable markets to get a foot on the property ladder.
This has led to increased demand and stronger growth in areas where properties are cheaper.
Breaking Australia down into the Australian Bureau of Statistics’ SA4 regions, PropTrack has found the top ten growth areas over the last year are all affordable areas in Queensland or South Australia.
The North Queensland city of Townsville leads the way with 20.2% growth over the past year, followed by the Central Queensland area, which includes the cities of Rockhampton and Gladstone, with 16.3%.
Then comes the Darling Downs-Maranoa region in southern Queensland—which includes the large centre of Roma—at 14.1%, then booming Toowoomba, with 13.4% growth.
Ipswich, with 11.3% annual price growth, and Wide Bay (which includes Bundaberg) with 10.9%, round out the six Queensland regions in the Top 10.
PropTrack says the Barossa-Yorke-Mid North region of South Australia, which takes in areas to the north of the Adelaide metro area and west to the Yorke Peninsula, saw 12.9% residential property price growth over the past year, followed closely by Adelaide’s Northern and Western suburbs (12% and 11.6% respectively) and South Australia South-East (11.8%), which takes in areas east and south of Adelaide all the way to the Victorian border, and includes Kangaroo Island.