After a period of cooling and stagnation primarily driven by the sharp rise in interest rates in 2022–24 and record-high price levels, Australia’s residential property market has moved from a slowdown into a renewed upswing in 2025. The policy pivot by the Reserve Bank of Australia (RBA), improved buyer sentiment, and persistent supply constraints have combined to rekindle demand.

While national headlines describe a rebound, the strength and timing vary by city, price band and property type — and WA/Perth shows its own pulse. For Perth sellers, buyers and landlords, local expertise and tailored strategy matter more than broad national headlines; this is where agencies like Bargoti Real Estate can translate market momentum into faster sales, better tenant outcomes and investment opportunities.

Australia’s housing market has soared to its strongest growth in nearly 4 years, with Sydney and Melbourne leading the rebound, Brisbane rising to the second-most expensive, and Perth and Adelaide showing signs of leveling off.

How the market turned: macro drivers behind the comeback

1. The clearest immediate catalyst has been the RBA’s easing cycle. After an extended period of hikes to tame inflation, early rate cuts in 2025 lowered mortgage servicing pressure for many households, improving borrowing capacity and — crucially — buyer confidence.

2. Historical patterns show that sentiment effects from rate cuts often appear before the complete credit transmission to the economy, leading to faster improvements in auction clearance and listing activity.

3. Australia continues to wrestle with long-term undersupply. New housing completions have lagged population growth in many regions for years, and the delayed pipeline of new dwellings means that when demand returns, price recovery can be sharper than anticipated.

4. Tight rental markets have also pushed investors back into buying, especially in growth corridors. Employment and wage momentum — even if modest — matters.

5. A robust jobs market and rising incomes lift serviceability and confidence, helping buyers re-engage. Governments’ household relief measures, alongside higher disposable incomes, create a supportive backdrop for housing demand.

6. Lower rates and signs of capital growth attract investor attention again. While regulations and exchange rate movements often constrain foreign buyer participation, local investors returning to the market strengthen auction competition and reduce vacancy pressures on landlords.

The data snapshot (what the numbers say)

1. CoreLogic and other significant indicators recorded the housing downturn ending and a series of monthly price rises after the first 2025 rate cut; national indices showed positive monthly movements, and some capitals reached new records in parts of 2025.

2. Auction clearance rates in major markets recovered toward long-run averages during spring selling seasons, indicating increased buyer engagement.

3. Forecasters and property commentators in 2025 expected continued upside as markets priced in further rate cuts and borrowing capacity improved.

Where Perth and WA fit into the story

1. Perth has often moved on a slightly different cycle compared with Sydney and Melbourne. After several years of mixed performance, Perth’s market showed renewed strength in 2025, driven by affordability relative to the eastern capitals, renewed investor interest, and steady local employment conditions.

2. Local agents report improving listing demand and solid sale volumes, with median sale prices in some suburbs rising and median days on market shortening.

3. For Bargoti Real Estate — active across suburbs including Dayton, Ellenbrook, Alkimos and others — this meant more vendor confidence and a tangible increase in buyer inquiries and successful transactions.

What “comeback” looks like in practice — buyers, sellers, investors, landlords

1. The market rebound is multi-speed. Homes priced correctly to current comps and marketed aggressively typically sell faster and at better prices during the upswing.

2. Spring and early autumn remain prime windows; invest in minor repairs, declutter, and professional imagery to capitalise on increased buyer activity.

3. Markets can overshoot on sentiment. Focus on affordability metrics, loan pre-approval and neighbourhood fundamentals (schools, commute, amenities).

4. Use local sales history and median days on market to frame offers; auctions can be riskier during high-sentiment periods.

5. Lower interest rates help, but ensure long-run yields and vacancy risk are modelled. Look for suburbs with rental growth and infrastructure pipelines. Strong PM reduces downtime and preserves yields — a compelling point for investors working with local managers like Bargoti.

6. As momentum shifts back to the biggest capitals, Australian home prices have posted their most significant quarterly gain since late 2021, signalling a turning point in the housing cycle.

7. According to new data from Domain, prices increased in nearly every location during the September quarter, hitting all-time highs for both homes and apartments and validating the market’s turn towards higher gear.

8. Stronger financing capacity, better consumer mood, rising real incomes, low stock levels, and the highest auction clearance rates in over a year have all contributed to the recovery.

Big-city resurgence

1. Sydney’s median home price increased 3.4% during the quarter to a record $1.75 million, the fastest pace in over two years and building on the increases from the previous quarter.

2. The market is regaining confidence, as seen in annual growth strengthening to 6.3%. While the difference between homes and apartments has grown to a record 108%, unit prices also hit a record $840,000, up 1.9% for the quarter.

3. To take advantage of current conditions while they persist, many are looking to buy before the subsequent recovery. It is anticipated that increased activity and more transactions will result from improved serviceability in both the business and residential sectors.

4. Lower rates, increased confidence, and a persistent demand for quality would be the defining characteristics of 2026. With its depth of buyers, infrastructural investment, and ongoing resilience, Western Sydney continues to be at the forefront of this trend and is positioned as Sydney’s growth engine.

House prices, quarterly and annual changes

1. House prices in Melbourne increased 2.2% to $1.08 million, marking the fourth consecutive gain and the most significant quarterly increase in over 4 years.  Housing values in the city are currently within 1% of their 2021 high.

2. At $590,600, unit prices increased 1.7% to their highest level in over three years.  Compared to 2023, when Melbourne trailed other capitals due to low sentiment and extensive listings, the recent growth represents a definite turnaround.

3. Better economic conditions, increased consumer confidence, and a slow stabilisation of borrowing costs are helping both cities.  The resumption of foreign migration and rising household earnings is also lessening affordability pressures.

Brisbane comes in second

1. The Brisbane housing market is still rewriting the national price hierarchy. Median house prices jumped 3.7 per cent over the quarter to $1.1 million, overtaking both Canberra and Melbourne to rank second nationally – an unparalleled milestone for the city.  

2. Unit prices surged 4.2% to $715,000, marking the longest continuous increase in history and the 18th straight quarter of gains.

3. Due to its relative affordability and allure as a place to live, the city continues to draw people from southern states.  

4. The fundamental mismatch between robust demand and limited supply is driving prices higher even as growth momentum is starting to slow.

Adelaide and Perth lose steam

1. Adelaide and Perth, which have been at the forefront of the country’s economic cycle for the last three years, are beginning to show indications of stability.

2. Although the pace has slowed from previous highs, Adelaide’s median home price increased 3.2% to a record $1.05 million, marking its 11th consecutive quarterly increase. Even though its annual growth rate dropped to 10.5%, it remains the most significant capital.

3. With a 5% increase to $632,700, the city’s unit market is still outperforming, making Adelaide the third-most-expensive capital for units and surpassing Canberra for the first time.

4. The median home price in Perth increased 1.6% to $981,000, continuing a 12-quarter upward trend, albeit at a rate that was just one-third that of the previous quarter.

5. The city is on the verge of surpassing the $1 million mark before the year is over. Perth’s standing as one of the nation’s most robust unit markets was maintained, with unit prices rising 4% to $560,000.

Unit prices, quarterly and annual changes

1. On Thursday, October 23, REIWA President Suzanne Brown stated that while unit prices were expected to climb by 15% this year, the median house sale price was on track for 10% annual growth.  

2. In the past, the median sale price of the unit market—which comprises flats, townhomes, villas, and housing units—grew more slowly than the median price of a home.

3. When consumers seek more affordable housing in prime locations, apartment and townhouse sale prices rise significantly.

4. Many suburbs offer apartments for sale at price points appealing to both first-time homebuyers and investors, despite unit prices now rising faster than house prices.

5. Although strong local economies and limited supply continue to support Perth and Adelaide, affordability issues and diminishing momentum suggest their boom periods are starting to level off.

Units narrow the gap

1. Although homes still lead the national recovery, buyer tastes are changing due to affordability challenges.

2. As first-time homebuyers and investors seek relative value, unit prices are rising faster than house prices in several cities, including Darwin, Adelaide, Perth, and Brisbane.

3. Unit growth has doubled across the combined capitals compared to a year ago, indicating a persistent undersupply of new developments and a desire for more affordable options.

4. Sydney and Melbourne continue to have the most significant performance gaps between property categories, with detached homes currently costing over 80% more than apartments.

5. However, that disparity is closing in other places: it has dropped to its lowest level in over three years in Perth and to a five-year low in Adelaide.

Affordability to cap gains

1. The next stage of the cycle is expected to be more erratic, despite the current upswing’s magnitude. Early indications of exhaustion in Adelaide and Perth counteract the reacceleration in Sydney and Melbourne, while in other cities, demand patterns are starting to be shaped by affordability restrictions.

2. Future improvements will likely be constrained by strained household budgets and high price-to-income ratios, even though interest rates are expected to remain unchanged.

3. Nonetheless, the market has more room to run through year-end, given the combination of a restricted housing supply, robust employment, and government incentives for first-time homebuyers.

4. Although growth is still widespread, it becomes more lopsided as cities progress through the cycle at varying rates. The national property cycle has resumed its expansion phase, although with new drivers.

Tactical playbook: how each market participant should operate in the rebound

1. Sellers — A 10-point checklist

• Order a current CMA (comparative market analysis).
• Fix visible defects (paint, front yard, lighting).
• Stage for target buyer (families, downsizers, investors).
• Professional photography + floor plan.
• Choose the selling method—auction vs. private treaty—based on the suburb’s dynamics.
• Use a 4–6 week marketing window for optimal exposure.
• Pre-qualify buyer interest where possible.
• Be realistic on inclusions (appliances, etc.).
• Plan settlement timelines with lender realities in mind.
• Partner with a local agent who shows weekly market updates (Bargoti provides these to vendors).

2. Buyers — A 9-step approach

• Get pre-approval and stress-test budgets.
• Identify 3–5 target suburbs with growth fundamentals.
• Attend auctions and be open to gauge sentiment.
• Use building inspections to conduct proactive pest checks.
• Keep it realistic — in high competition, unconditional offers are risky.
• Consider long-term resale and rental potential.
• Factor fees, rates, and strata (if applicable).
• Use local agent connections for off-market opportunities.
• Negotiate with data and empathy; vendors are more likely to accept creative solutions (flexible settlement, rent-back).

3. Investors — framework for 2025+

• Growth corridors with infrastructure and transport links; suburbs with median rents growing faster than vacancy rates.
• With re-emerging capital gains but improving yields, many investors will prefer a balanced buy-and-hold with strategic upgrades.
• Stress test for one percentage point higher rates and 3–6 month rental voids.

Conclusion — Turning market momentum into real outcomes

The shift from slowdown to surge in Australia’s property market is a story of policy, psychology and structural supply constraints. For homeowners, buyers and investors, the return of momentum rewards preparation, local insight and disciplined decision-making. Agencies that combine data, regional relationships and end-to-end services — such as Bargoti Real Estate in Perth — are well positioned to help clients capture the upside while managing risk.

If you’re a vendor ready to list, a buyer planning to act, or an investor seeking properties in Perth, this is a market where speed without haste, data without guesswork, and local execution win. Bargoti Real Estate’s market performance in local suburbs demonstrates how focused local expertise can convert broad market improvements into positive, tangible outcomes for clients.

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