Australian Property Market Reaches Unprecedented Heights as Prices Soar Nationwide
Australian house prices have continued their relentless upward trajectory, with every major city except one achieving record high levels in a development that represents a significant blow for prospective buyers. Sydney, Brisbane, Melbourne, Adelaide, Darwin, Perth, and Hobart have all reached this grim milestone, with Canberra being the sole capital city not to make the list. The latest Domain data, released on Thursday, reveals that house prices across the country increased by a combined 3.9 per cent during the December quarter alone.
National Price Surge and Psychological Milestones
This quarterly rise contributes to a staggering 9.6 per cent spike across the entirety of 2025, with average prices shooting up by an astonishing $111,728. Perth has now become the sixth capital city where the median house price has soared beyond the $1 million mark, joining Sydney, Melbourne, Canberra, Brisbane, and Adelaide in this exclusive club. Domain's chief of research and economics, Dr Nicola Powell, described the level of growth as 'ferocious' and highlighted that the million-dollar median represents 'a real psychological milestone' for the market.
'It is going to have an impact on confidence among first-home buyers and this feeling of the inability to keep up,' Dr Powell remarked earlier this week. 'When there is a lack of choice, that means that budgets get deeper for buyers, because they become very fearful of missing out.' She further noted that rapid price growth has pushed home ownership further out of reach for many Australians, forcing tougher financial trade-offs and longer saving periods.
Capital City Breakdown: Sydney and Melbourne Lead the Charge
Demand in the Sydney housing market remains exceptionally high, with the median house price rising by 6.4 per cent, equivalent to $105,487, over the past year. The median price for a home has now reached a record $1.76 million, signifying a third consecutive quarter of growth. According to Domain's quarterly report, 'Sydney's housing market is still strengthening, albeit at a more measured pace.' The report also observed that momentum is now clearly shifting toward units, with Sydney unit prices rising 2.1 per cent in the December quarter to a record $844,390 – the strongest quarterly rise in two and a half years.
'While units have outperformed houses this quarter, the price gap remains near a record at 108 per cent, meaning a house still costs more than double the price of a unit – reinforcing why demand is increasingly tilting toward higher-density housing,' the report stated.
In Melbourne, house prices rose by 7.4 per cent, or $76,342, in the last year, reaching a record median of $1,111,084. Domain noted that 'growth has accelerated for the third straight quarter and is running at almost double the pace of the same time last year.' Momentum has also strengthened in the unit market, with unit prices climbing 4.4 per cent annually, the strongest growth in four years, leaving the median at $601,184. Interestingly, despite this growth, Melbourne is now the third most affordable capital city in which to buy a unit for the first time on record.
Regional Variations and Emerging Trends
Brisbane, Adelaide, Perth, and Darwin are leading the national upswing in house prices, a trend underpinned by tight supply, lifestyle-driven demand, and resilient local economies. Brisbane's median house price now stands at $1,171,237, compared to $1,033,999 a year ago, representing an annual change of 13.3 per cent. In Adelaide, the median price for a home has reached $1,094,427, up 11.9 per cent, which Domain described as the 'fastest rate in a year.'
Darwin witnessed an extraordinary surge, with house prices soaring 22.4 per cent to a median of $690,896, up from $564,581 in December 2024. Meanwhile, momentum continues to build in Canberra, where house prices experienced an annual growth of 6.1 per cent, or $65,147, bringing the median price to $1,139,969. This marks the strongest result in three and a half years, with prices now just 2.8 per cent below their previous peak.
Hobart also saw significant movement, with house prices climbing 6.1 per cent, or $44,310, in the December quarter to a record $767,451 – the strongest quarterly result in four years. This comprehensive data paints a picture of a property market that shows no signs of slowing down, presenting ongoing challenges for those attempting to enter the housing market for the first time.
