Not All Growth Is Equal: Breaking Down Australia’s Latest Property Numbers

National property headlines usually make Australia’s housing market look like one single story. Prices are up. Demand is strong. Supply remains tight. But the reality underneath the averages tells a very different story.

Some cities are accelerating sharply. Others are losing momentum. Lower-priced homes are outperforming premium stock. Regional markets are quietly beating several capital cities. For investors, understanding where growth is strongest and where it’s lagging and what it means for your property strategy this year.

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Let us explore it:

How the Market Looked in 2025

Before we dive deep into 2026 trends, it’s worth revisiting what happened in 2025:

• National dwelling values increased by 8.6%, one of the strongest annual gains in recent years.
• Lower-priced homes grew faster than higher-priced homes, clearly showing where competition is fiercest.
• Nearly 560,979 home sales were recorded, approximately 5-7% above recent averages.
• The median time on market nationwide was 27 days, down from 29 a year ago. Faster turnover indicates stronger buyer demand.
• Total housing stock value climbed to $12.3 trillion, underscoring housing’s central role in household wealth.

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But and this is the key, not all regions and dwelling types grew at the same rate. This uneven growth is what savvy investors must focus on.

A Closer Look: Growth Isn’t Uniform

Here’s a breakdown of annual dwelling value changes across capital cities and regional markets in 2025:

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Big picture: While Darwin, Perth and Brisbane delivered strong growth, momentum is broadening across other states as well. Regional markets continue to outperform combined capital averages and several southern markets are now showing improving momentum after a softer period.

Why Some Markets Are Performing Differently

Western Australia (WA)

Perth continues to benefit from affordability advantages, tight rental markets and solid employment conditions. Strong migration inflows and limited housing supply are keeping upward pressure on prices and rents.

Queensland (QLD)

Brisbane remains a standout performer thanks to interstate migration, infrastructure investment and lifestyle appeal. Many buyers are still finding better value compared to southern capitals.

South Australia (SA)

Adelaide continues to show steady and resilient growth. Its relative affordability and stable employment base are supporting consistent buyer demand without extreme volatility.

Victoria (VIC)

After a slower period, momentum is returning in parts of Victoria, particularly in selected Melbourne suburbs and key regional centres. Buyer confidence is improving as pricing stabilises, creating renewed activity and early signs of growth recovery.

New South Wales (NSW)

Sydney remains positive but constrained by affordability ceilings. Growth is more selective and suburb-driven, with stronger performance emerging in lifestyle corridors and well-connected middle-ring locations.

ACT

Canberra continue to experience moderate growth. While not leading the cycle, both markets remain supported by stable employment and limited new housing supply.

Tasmania (TAS)

Hobart and regional TAS sitting at bottom of the cycle will see a good growth. With mutli projects in pipeline and given entry prices are generally lower than comparable suburbs in Melbourne, Sydney or Brisbane, an investor can secure a house on land without stretching serviceability. Click here to read more about TAS.

Northern Territory (NT)

Darwin recorded strong growth off a smaller base. However, it represents a narrower market and should be viewed as part of a broader national pattern rather than a sole growth indicator.

National averages simply do not reflect these important state-level differences.

Not All Price Growth Is Created Equal

Another important layer is which price segments are growing fastest. The Cotality data shows that lower-priced (lower-quartile) dwellings are outperforming upper-priced homes across most markets. 

It indicates:

• First-home buyer competition remains intense.
• Investors targeting affordable rental stock face tighter competition.
• Premium markets are experiencing slower turnover and softer price momentum.

It matters because growth driven by affordability pressure tends to be more sustainable than growth driven by speculative demand. Investors relying only on median price movements may miss where the strongest underlying demand actually exists.

Short-Term Momentum Is Cooling

While annual growth remains solid, recent monthly data signals moderation.

• Monthly national price growth slowed to roughly 0.7% in December, the weakest reading in several months.
• Sydney and Melbourne recorded small monthly declines, while smaller capitals continued modest gains.
• Listing volumes remain tight, but buyer urgency has eased slightly as borrowing conditions remain restrictive.

It does not signal a downturn. It suggests the market is transitioning from rapid recovery into a more balanced phase where price growth becomes more selective and suburb-driven.

For investors, this environment rewards precision rather than broad exposure.

Rental Growth Remains Strong

Price growth may be moderating in some markets, but rental conditions remain tight.

• National rents increased around 5% over 2025.
• Vacancy rates remain near historic lows in many cities.
• Some regional markets recorded double-digit rental growth.

Strong rental demand continues to support investor cash flow even where capital growth is stabilising. In markets like Perth, Brisbane and parts of regional Australia, yields remain materially stronger than in Sydney and Melbourne. Rental performance is increasingly playing a larger role in total return calculations.

Why Growth Is Uneven

Several structural factors explain why growth is fragmenting across markets:

1. Affordability ceilings: High-priced cities face natural demand limits as borrowing power tightens.

2. Migration and population distribution: Interstate migration continues to favour Queensland, Western Australia and select regional hubs.

3. Housing supply constraints: Construction pipelines remain subdued due to labour shortages and cost pressures.

4. Investor lending discipline: Lenders remain cautious, forcing higher-quality borrower profiles and stronger serviceability buffers. These forces amplify local differences rather than smoothing them out.

What Investors Should Do Now

Here are clear, strategic steps based on current data:

1. Analyse Growth Locally, Not Nationally

National averages mask critical differences. Use local dwelling price growth, rental demand and inventory trends to pinpoint opportunities.

2. Track Price Segment Dynamics

Lower quartile properties are seeing stronger competition than upper quartile and this can affect both yield and capital growth potential.

3. Don’t Overlook Regional Markets

Where affordability remains reasonable and jobs/lifestyle demand is growing, regional growth can outperform some capital cities.

4. Watch Leading Indicators

Metrics like time on market, inventory trends and new listing flows usually signal future shifts before headline price changes appear.

Key Takeaways

• National growth remains solid, but it is uneven across cities and price segments.
• Darwin, Perth and Brisbane continue to outperform Sydney and Melbourne.
• Victoria is showing renewed momentum in select areas.
• Regional markets remain competitive relative to capital cities.
• Lower-priced properties are experiencing stronger demand pressure than premium stock.
• Short-term momentum is cooling, while rental markets remain tight.

The Australian property market is no longer moving in unison. Data-driven selection is becoming increasingly important for protecting capital and maximising long-term performance.

Conclusion: Not All Growth Is Equal

Australia’s housing market has remained surprisingly resilient. National home values and dwelling stocks achieved strong gains in 2025, supported by sustained demand, low listings and regional contributors.

But growth varies widely:

• Some cities are outperforming
• Others are slowing
• Lower-priced homes show more intense competition
• Rental markets remain strong even where capital gains ease

For investor success in 2026, data matters more than headlines. Dive into local metrics, understand where demand is strongest and align it with your investment strategy.

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If you want deep, data-driven property insights tailored to your goals, PropXperts can help, from suburb selection to negotiation and long-term performance modelling. Book a consultation with PropXperts today and make confident decisions backed by real market data.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or investment advice. Market data is sourced from publicly available reports and is believed to be accurate at the time of publication. Readers should conduct their own research and seek independent professional advice before making any property or investment decisions.