December Home Values Rise, With Signs of a Slowdown

As we head into December, home values have risen nationally for three consecutive months, each recording growth of 1% or more. However, there are early signs that this pace is starting to slow. Cost-of-living pressures are tempering buyer confidence in major cities such as Sydney and Melbourne, while low vacancy rates continue to make entering the market more challenging for prospective homeowners.

What is the Home Value Index (HVI)?

The Home Value Index (HVI)^[1], also known as the Hedonic Home Value Index, leverages recent property sales to track property trends across the country. It serves as a key metric for analysing the performance of the Australian residential property market.

Source: Cotality HVI Report December 2025

Perth Continues to Boom

Perth outpaced the rest of the nation, recording a 2.4% rise, more than double the national median growth. Brisbane, Adelaide, and Darwin followed closely at 1.9% each, continuing the trend of mid-sized cities leading month-on-month growth.

With a median property value of $914,229, Perth is edging closer to joining Australia’s million-dollar city club. This is great for investors who jumped on Perth early on, but the city that has regularly been positioned as one of Australia’s most affordable capitals may be pushing home buyers out of the market.

State Market Report

Sydney

The median home value has increased 0.5% , and is now $1,269,659.

Melbourne

The median home value has increased 0.3% , and is now $823,495.

Brisbane

The median home value has increased 1.9% and is now $1,015,767.

Adelaide

The median home value has increased 1.9% , and is now $891,004.

Perth

The median home value has increased 1.9% , and is now $914,229.

Hobart

The median home value has increased 1.2% , and is now $703,340.

Darwin

The median home value has increased 1.9% and is now $578,871

Canberra

The median home value has increased 1.0% and is now $891,626

The Affordability Question

Sydney and Melbourne recorded the lowest monthly increases among the capitals, 0.5% and 0.3% respectively. Both cities continue to face significant affordability challenges, with high housing costs and sluggish wage growth placing a ceiling on price momentum.

What This Means for Buyers

Despite higher costs, growing population and slowing construction^[2] , buyer demand has continued to be steady, likely shaped by first-home owner initiatives such as the 5% deposit scheme and three interest rate cuts delivered in 2025. As the cash rate stabilises, it will be interesting to see if buyer activity eases as a result.

What This Means for Vendors

Vendors are still benefiting from record home values at a national level. While the end of the spring selling season typically brings softer conditions, early indications suggest that 2026 will continue to deliver growth, although likely at a gentler pace than what we’ve seen this year.

If you’re thinking about buying, don’t let rising values discourage you. A conversation with your local MoneyQuest broker can help you gain a clearer understanding of your options and what your path to homeownership could look like. Reach out for a zero-cost consultation, and take the first steps towards homeownership.

[1] Cotality. HVI December 2025. 1^st of December 2025. Viewed 2^nd of September 2025

[2] Crowley, T. These charts show the effect of migration on Australia’s housing story. ABC. 7^th of November 2025, viewed 2^nd of December 2025.

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