House Price Growth Eases Across Australia’s Major Markets

Australia’s housing boom is showing signs of cooling. In December 2025, national home values rose only about 0.7% – the smallest monthly increase in five months. Even so, prices are still much higher than a year ago – roughly +8.6% nationally in 2025 (adding ~$70K to the median home). The big cities are softening: Sydney and Melbourne both eased by about –0.1% in December. High prices there (Sydney’s median house is around $1.5 million) and affordability pressure are “taking some heat out” of those markets.

Perth, Adelaide and other undersupplied markets continue to outperform. In December, Perth and Adelaide saw ~+1.9% growth(Darwin and Brisbane +1.6%). Across Australia, cheap homes are still in demand. Experts note that everything priced under about $1 million is hot – helped by the new 5% deposit Home Guarantee Scheme. These policies are accelerating first‑home buyer demand at the entry end of the market. At the same time, lending is getting tighter. APRA’s rule means only 20% of new loans can be over six times a borrower’s income. In practice, that caps many buyers’ budgets. Put simply: with slower growth and stricter lending, choosing the right property is more important than ever.

Key takeaways for buyers

• Pick markets carefully. Slowing growth in Sydney and Melbourne shows that high‑priced, saturated markets now carry more risk. Look instead at mid‑sized capitals and regional areas where supply is tight, and values are still rising. Perth, Adelaide and parts of South‑East Queensland remain strong, and often start from a more affordable base. These undersupplied markets tend to hold up better when the heat comes off expensive metros.
  
  

• Stay within your price range. The fastest gains now come in lower price brackets. The Home Guarantee scheme is driving demand under $1 million, but that also means competition is fierce. High‑end suburbs have slowed, so buyers should focus on value – the best entry-price options and suburbs with room to grow. In other words, discipline at the entry level matters.
  
  

• Mind borrowing limits and rates. With banks enforcing the ~6× income cap and higher interest rates likely on the horizon, it’s critical to check your budget now. Confirm your borrowing power and allow some buffer for rate rises. We work closely with mortgage brokers to get solid loan pre-approvals under the new rules, so you know exactly what you can afford before making an offer.
  
  

• Use expert help. In a market like this, a buyer’s agent can cut through the hype. We’ll help you spot the pockets of value and negotiate deals, rather than chasing headlines. With growth subdued, selection matters more than timing – the right property in the right suburb is worth more than trying to pick a market bottom. Our team focuses on fundamentals, off‑market opportunities and tailored suburb research to give you confidence in your purchase.
  

Ready to buy with confidence? Our agents at Prowealth Properties can guide you through the changes and put a plan together. Call us on +61 433 853 248 or book a free consultation online today. Our expert team is here to help you turn today’s changing market into your best purchase. You can follow us on LinkedIn and Instagram to keep track of what’s happening in the market.

Prowealth Properties is your trusted partner in Australia’s changing property market.