July 2025 Quarterly Property Update: Trends and Market Analysis

During the quarter, there was a broad-based rise in housing values. Housing values gained momentum across almost all markets over the three months to the end of May, largely due to rate cuts. Buyer confidence is increasing thanks to the cash rate reductions in February and May, coupled with optimism that more rate cuts might be on the horizon.

Australian dwelling values increased by 1.3% over the quarter, with broadly based gains meaning that every capital city recorded a rise of at least 0.5%.

Despite the momentum demonstrated by the quarterly figures, the pace of annual gains nationally slowed to 3.3%. This represents the slowest annual change since the year ending August 2023.

A rebound where values were the weakest

The rise in property values over the quarter continues to be led by the lower ends of the market, with Darwin recording the highest quarterly increase of the capitals with a 4.3% rise.

However, it should be noted that some more expensive market segments are starting to accelerate in response to rate cuts.

Regional markets are also demonstrating a positive trend, recording a rise in values of 1.6% over the past three months.

Tariff announcements and a lead-up to the election knocked confidence

Household confidence slipped in April, with the US’s ‘Liberation Day’ tariff announcements and the lead up to the Australian federal election also causing uncertainty.

Positive factors supporting growth

The main factor boosting buyer confidence and the volume of property sales is the widespread expectation that interest rates are set to reduce further as the RBA appears to be becoming more comfortable with the path of inflation. Confidence that inflation will remain within the target range is crucial for interest rates to continue to reduce.

Some renewed confidence in household decision making after the federal election is also likely to support further price growth, with enhanced policies to support first home buyers announced.

The housing undersupply is also playing a role in supporting demand. Recent figures show commencements moving in the wrong direction, over the December 2024 quarter, holding below the decade average. Additionally, the barriers for building more homes remain substantial, with construction costs rising through the March quarter.

Downside factors

There are also factors at play that will keep housing values in check to some extent. Affordability pressures are anticipated to constrain housing demand, and lower population growth should also help to quell the accrual of housing demand in the absence of an increase in supply.

It is anticipated that the factors supporting growth will outweigh these, and housing values will continue to post modest rises.

Dwelling values over the quarter 

Melbourne

The Victorian capital posted a 1.2% quarterly move according to Cotality (previously Corelogic) figures, taking the city’s median dwelling price to $791,303. Investors should take note that the gross rental yield figure for Melbourne is 3.7%.

Sydney

In the three months to May’s end, Sydney experienced a dwelling value change of 1.1%, resulting in a median of $1.203 million. The gross rental yield for the Harbour City remains the lowest of the capitals at 3.1%.

Brisbane

The Queensland capital has again recorded the second most expensive spot for dwelling values at $917,992 and a quarterly rise of 1.6%. Brisbane has recorded a gross rental yield of 3.7%.

Canberra

The national capital recorded a rise of 0.5% during the quarter, with the median now sitting at $855,663. For Canberra, the gross rental yield is 4.1%.

Perth

Perth prices increased 1.6% over the quarter, taking their median to $813,810. Perth recorded a 4.3% gross rental yield.

For more information about how you might be able to purchase a property in the current market, get in touch with us today.

Note: all figures in the city snapshots are sourced from: Cotality national Home Value Index (May 2025)

Important information – Oracle Advisory Group makes no representation or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. The information in this document is general information only and is not based on the objectives, financial situation or needs of any particular investor. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek their own professional advice. Past performance is not a reliable indicator of future performance. The information provided in the document is current as the time of publication.