August 2025 Property Market Update: Spring Momentum Builds As Housing Values Rise
05 Sep, 2025
Updated: 05 Sep, 2025
Australia’s property market is gaining traction as we move into spring, with the national Home Value Index (HVI) rising by 0.7% in August, the strongest monthly gain since May last year. This marks the second consecutive month of accelerated growth, lifting the annual increase to 4.1%. As buyer demand strengthens and stock levels remain tight, the market appears primed for an active spring selling season.
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State Performance Overview
| State/City | HVI Change (%) | Description |
|---|---|---|
| Sydney | +0.8% | Sydney values rose solidly as buyer confidence improved ahead of spring. Annual growth is now 2.1%, with tight supply continuing to support prices. |
| Melbourne | +0.3% | Modest growth in August highlights lingering affordability concerns. Annual gains remain subdued at 1.4%, reflecting cautious buyer activity. |
| Brisbane | +1.2% | Brisbane remains one of the strongest markets, driven by affordability, low supply, and strong demand. Annual growth reached 7.9%. |
| Adelaide | +0.9% | Consistent demand and tight listings underpinned Adelaide’s 0.9% gain. Annual values are up 6.5%, maintaining strong momentum. |
| Perth | +1.1% | Perth continued its strong run, supported by investor activity and low housing stock. Annual growth sits at 6.6%. |
| Hobart | -0.2% | The only capital to post a decline, Hobart continues to lag with a -0.2% drop over the last month. |
| Darwin | +1.0% | Darwin recorded a solid rise, with year-to-date growth above 10%. However, long-term volatility remains a factor. |
| Canberra | +0.4% | Canberra posted a small monthly gain, rebounding from earlier weakness. Annual growth improved to 1.6%. |
Regional vs. Capital Cities
Capital cities slightly outperformed regional areas in August, with combined capitals rising 0.8% compared to a 0.5% increase for combined regionals. This pattern has persisted over recent months. Demand continues to favour regional markets offering lifestyle appeal and better affordability, especially in areas with proximity to capital cities.
Rental Market Overview
Rental growth re-accelerated in August, with national rents rising 0.5%, marking the strongest monthly gain since May 2024. This upswing, the second consecutive monthly increase, lifted annual rental growth to 4.1%, indicating a renewed tightening of rental conditions.
Vacancy rates remain extremely low at 1.5%, well below the pre-pandemic five-year average of 3.3%. These tight conditions are helping sustain upward pressure on rents across most markets.
Market Forecast
Looking ahead, several forces are shaping the market’s outlook:
- The housing market is expected to remain stable, though price growth is likely to moderate in the months ahead.
- Affordability pressures, particularly in Sydney and Melbourne, are limiting buyer capacity and weighing on demand.
- Elevated interest rates continue to restrict borrowing power, especially for first-home buyers and lower-income households.
- Demand is being supported by strong fundamentals, including low mortgage arrears, a solid labour market, and high household equity.
- Structural factors such as population growth, limited housing supply, and government incentives are helping to sustain market activity.
While momentum has improved into spring, Cotality notes that future gains are likely to be slower and more uneven due to tightening affordability and evolving credit conditions.
