Australia’s housing market concluded 2025 with significant price increases despite looming concerns over rising interest rates and decreasing affordability. According to Cotality, the momentum has dampened heading into the New Year.
A series of rate cuts last year by the Reserve Bank of Australia sparked a housing boom, yet inflationary pressures have led to expectations of rate hikes as early as February. December saw a modest national price rise of 0.7%, reaching a median of A$901,257, though major cities like Sydney and Melbourne experienced slight declines.
The market’s top end shows signs of stabilization, while costs have surged mid-to-lower range. Continued challenges with affordability and regulatory oversight are potential obstacles, although supply shortages could cushion the downward risks.
(With inputs from agencies.)