RBA cuts drive housing price surge - PropTrack & Ray White

Two new measures show that Australian residential property prices are gaining significant momentum, driven by rate cuts from the Reserve Bank of Australia.

The latest price data from REA Group’s PropTrack and Ray White’s Neoval suggest that price growth is accelerating, with one economist suggesting that if the current trend of growth continues, house prices could grow by more than 12.5% over the next year.

PropTrack’s Home Price Index

REA Group’s latest PropTrack monthly Home Price Index finds national home prices rose 0.4% in June 2025, taking prices to a record high.

PropTrack says the median Australian home is now worth $821,000 or $40,900 (4.6%) higher than a year ago.

“As interest rates have fallen, price momentum has strengthened and extended across the country, with all markets recording gains in June,” says REA Group Senior Economist Eleanor Creagh.

Indeed, all of the city and “rest-of-state” regional markets PropTrack measures saw a price uplift in June, with the capital cities leading the way.

“Capital city markets are leading the upturn, with price growth in all cities in June, following outperformance by Adelaide, Brisbane and Perth in 2024,” Ms Creagh says.

PropTrack figures show Adelaide posted the strongest monthly rise (+0.6%), retaining its title as the strongest-performing capital city over the past year with an uplift of 9.8%.

Sydney (+0.5%), and Hobart (+0.5%) also recorded solid rises in June, while Brisbane and Perth recorded strong annual growth, up 8.3% and 7.8% respectively.

PropTracks says on its numbers, the median house price in Brisbane has now risen above $1,000,000 for the first time.

Prices in Melbourne rose 0.3%, continuing the city’s recovery.

However, values still remain 1.1% below their 2022 peak.

“Market momentum is building amid renewed buyer confidence and improved sentiment, buoyed by falling interest rates and expectations of another rate cut in July,” REA Group Senior Economist Eleanor Creagh says.

“However, the upturn remains measured as affordability constraints keep the pace of growth in check.”

While growth in regional Australia has been slower than the price rebound in the capitals in 2025, PropTrack says regional markets remain resilient, supported by “affordability and lifestyle appeal.”

Regional prices have grown more than 65% over the past five years.

“Further interest rate cuts expected later this year will ease borrowing costs, adding to the momentum in housing demand and reinforcing recent price growth,” Eleanor Creagh says.

“In addition, population growth and limited new supply are also placing upward pressure on prices, especially at the more affordable end of the market.

“With interest rates moving lower, these factors are likely to sustain price growth over the second half of 2025.”

However, Ms Creagh remains guarded about the outlook over the next 12 months.

“Despite these tailwinds, the upturn remains gradual and stretched affordability will see a more measured upswing than in previous easing cycles,” she says.

Neoval’s House & Unit Price Trends

Ray White’s in-house data analytics firm Neoval - which uses a “geometric mean” price measure rather than a median figure - paints a more bullish picture of the property market.

“Australia's housing market is now in a coordinated acceleration phase, with every single major market now exhibiting monthly growth rates that signal significant momentum building across the nation,” says Ray White’s Chief Economist Nerida Conisbee.

Looking at house markets, she says Perth's “1.3% monthly growth, if sustained, would deliver annual returns well above its current 11.6% annual rate.

“Similarly, Darwin's 1.3% monthly pace suggests the market is running considerably hotter than its 7.1% annual figure indicates, whilst even slower markets like Melbourne and Sydney are showing renewed vigour with 0.5% monthly growth that exceeds what their recent annual growth rates of 3.0% and 4.5% respectively might suggest.”

When it comes to units, Neoval says Perth leads the charge at 1.4% monthly growth, with Adelaide and Brisbane both maintaining solid 1.0% monthly momentum.

Nerida Conisbee says the price acceleration “appears to be directly driven by the Reserve Bank's interest rate cutting cycle, with two cuts already delivered this year and three more anticipated before year's end.”

Ms Conisbee says if current monthly growth rates continue across the nation, Australia could be looking at annual house price growth “of around 12.7% by mid-2026” - nearly double the current 7.0% annual rate.

As for units, that could see annual price growth accelerate from 5.2% to 7.4%.

“Such acceleration would push the national median house price from $941,000 to over $1.06 million within 12 months, representing a $119,000 increase, while the unit median would rise from $695,000 to $746,000, an increase of around $52,000,” the Ray White Chief Economist says.

“With further rate cuts expected to provide additional stimulus, this coordinated acceleration phase may well strengthen further.”