Perth continues to lead the nation with house price growth at 2.4 per cent as Sydney and Melbourne's growth dwindles.
New data has shown Perth’s median home values passed $900,000 for the month of November as it continues to close the gap to $1 million and lead the nation in price growth.
The latest home value index report released by Cotality (formerly CoreLogic) today demonstrated Perth’s strength in house price growth, increasing by 2.4 per cent to reach $914,229.
Every capital city, except the two largest Australian cities, posted house price growth above the national average of 1 per cent for November.
Sydney and Melbourne showed mild growth of 0.5 per cent and 0.3 per cent respectively.
Cotality head of Australian residential research Eliza Owen told ABC News this morning that Perth’s growth was due to a number of factors.
“We've actually seen double digit increases across the Perth market, both in 2024 and now it's going to be finishing strong in 2025 up about 13 per cent over the past 12 months,” she said.
“It comes back to a deficit of supply where listings volumes across Perth are about 40 per cent lower than where they would usually be this time of year, based on a historic five-year average.
“We've seen really strong interstate migration to Western Australia for the past few years, strong jobs growth, and that's been met with constrained supply.”
Despite Perth experiencing 80 per cent growth over the past five years, the median home value was still relatively affordable against the national average of $980,000.
Source: Cotality
Perth nears $1m
Former president of the Real Estate Institute of Western Australia, Damian Collins, predicted Perth would reach a median home value of $1 million in 2027.
“A 2.4 per cent rise in dwelling values in November has locked in a 13.1 per cent gain for Perth in the 12 months to the end of November, with a million-dollar median for all dwellings becoming a destination we are fast approaching,” the Momentum Wealth managing director said in a statement today.
“Our analysis forecasts that 2027 will be the year the typical Perth home reaches this significant milestone.”
Ray White Group chief economist Nerida Conisbee also weighed in on the analysis, pointing to AUKUS as a new housing demand driver to watch in Perth.
“While it won’t recreate the intensity of WA’s mining booms, the scale and timing of the investment mean it will still matter for Perth’s housing outlook, particularly in the south-west corridor,” she said.
“The investment profile is significant.
“More than $20 billion will flow into WA over the next decade through upgrades to the Henderson shipbuilding precinct and HMAS Stirling, supported by the creation of over 10,000 construction and shipbuilding jobs and an additional 3,000 roles linked to the submarine base.”
The long-term, metro-based growth would likely be seen around Rockingham, Kwinana, Cockburn and Fremantle, Ms Conisbee said.
“This localised effect means the impact may feel large on the ground, even if the overall magnitude is smaller than past resources cycles,” she said.
Ms Conisbee noted the backdrop of strong price growth, tight rental conditions and construction delays would mean even a modest labour inflow would have an outsized impact.
“AUKUS growth will be gradual and staged, building over several years,” she said.
“This reduces the likelihood of a sudden price surge but creates a steady, persistent pull on housing that becomes more noticeable as supply struggles to keep pace.
“The impact will be uneven, highly localised, and most visible in suburbs closest to WA’s growing defence precinct.”
Mid-sized cities shine
The phenomenon of mid-sized capital cities outdoing larger cities in median house price growth was similar to trends seen in late 2023 and 2024, Cotality research director Tim Lawless observed.
Ms Owen said a driver of Sydney and Melbourne’s more moderate growth was better supply.
“For Sydney, home values were up 0.5 per cent … but that's down from a recent high of 0. 9 per cent growth in August,” she said.
“It's a more well supplied city, at least compared to the broader capitals.
“And of course, price point is likely weighing on demand, with Sydney's median dwelling value of all houses and units across greater Sydney now pushing $1.3 million.
“For Melbourne, I think it's a case of relatively healthy levels of supply relative to demand, and we've also seen additional demand stripped out with the increase of investor property taxes and charges over the past three years a few months ago.”
Interest rate cuts
November was the third consecutive month in which the nation’s median house prices rose by 1 per cent but Cotality reported this was moderating.
Ms Owen noted this showed a loss in confidence in further rate reductions.
“… With monthly growth coming in at 1 per cent compared to 1.1 per cent, it’s fair to say there's been a change in the outlook for inflation and interest rates,” she said.
“We also saw last week, the banking regulator (the Australian Prudential Regulation Authority) announced some curb to lending conditions as well.
“Not that it would have a huge impact, but I think overall, 2026 is likely to see a softer growth rate than what we've seen this year.
“It's looking as if the 2025 values will sit about 8 per cent higher, but the difference is next year, there's not the same anticipation of successive interest rate cuts.”
