December is not always the busiest month for real estate activity, yet Cotality’s national Home Value Index still recorded a 0.7% increase in dwelling values[i] in the final month of 2025.

Over 2025, Australian residential property values rose 8.6%, adding approximately $71,400 to the national median dwelling value, according to Cotality. This is the strongest annual growth recorded since the Covid-impacted year of 2021, when values surged 24.5%.

Every Australian capital city and rest-of-state region recorded growth in 2025 (see table: Index Results as at 31 December 2025), with growth ranging from a strong 18.9% rise in Darwin to a more modest 4.8% increase in Melbourne.

Meanwhile, supply remains constrained, with Raine & Horne data showing appraisals down nationally by almost 15% year-on-year in December, while listings declined by just over 15.5%.

“This ongoing shortage of available stock and consistent numbers at open for inspections continues to underpin price growth across many markets,” said Angus Raine, Executive Chairman of Raine & Horne.

And the the winner is ….Darwin

David Oliver, General Manager of Raine & Horne Darwin, said several factors, including real estate affordability contributed to Darwin’s standout performance.

“It really helps that our median house price of $586,912 is around half of Sydney’s $1,280,613 median,” David said. “That price point is attracting strong local and interstate investor interest, particularly given rental yields of around 6.2%, which are roughly double those seen in some southern capital cities.”

At the same time, Darwin’s affordability has encouraged workers who may have previously left Darwin for cheaper regional markets in the southern states to stay put. “It’s now cheaper to buy in Darwin than some regional towns in NSW, Queensland Victoria, SA and Tasmania,” David said.

“When you combine these factors with very limited new residential supply over the past decade in Darwin, limited land release, an exhausted established market and growth of around 18% in 2025 is not unexpected.”

Regional markets also continued to outperform the capitals. In December, dwelling values across combined regional Australia rose 1.0%, lifting the median to $734,351, double the 0.5% monthly growth recorded across the combined capital cities.

Over the year, regional dwelling values rose by 9.7%, outpacing the 8.2% annual rise across the combined capitals. Regional Western Australia led the nation with 16.1% growth, which is still behind Darwin, followed by regional Queensland, up 12.6%, while regional Victoria recorded the slowest growth, with values rising 6.0%.

Looking ahead to 2026, early January data showed inflation cooled in November, despite the much-hyped Black Friday and Cyber Monday sales. “This easing has taken some pressure off the Reserve Bank of Australia to lift the cash rate in February, which is great news for first home buyers looking to jump onto the property ladder in 2026 and established property owners with a mortgage,” Angus Raine said.

Australian Bureau of Statistics data released on 7 January shows headline inflation eased from an annual rate of 3.8% in October to 3.4% in November[ii], while trimmed mean inflation slowed from 3.3% to 3.2% over the same period.

Index Results as at 31 December 2025

 (Source: Cotality Home Value Index 1 January 2025)

If you’re considering listing a property this summer, contact your local Raine & Horne agent today.

[i] https://www.cotality.com/au/insights/articles/2025-delivers-strong-housing-gains-but-2026-set-for-a-softer-landing-as-rate-fears-and-affordability-bite#:~:text=%E2%80%9CA%20'higher%20for%20longer',the%20market%20were%201.1%25%20higher.

[ii] https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release