According to Cotality’s latest reporting, national home values finished 2025 around 8% higher than where they started the year. After slowing in late 2024, price growth regained momentum through 2025, supported by three rate cuts, easing inflation and the introduction of the new 5% deposit scheme. As buyers’ agents, we note that while headline growth is strong, the gains aren’t uniform.
Performance varied widely by location. Darwin led the capital cities with approximately 17% growth over the year, while Perth and Brisbane recorded gains of around 15%. In contrast, Melbourne's and Sydney's growth rates were substantially smaller than their regional counterparts from Queensland, Western Australia and New South Wales which had over 2 to 3% annual increases in many areas. In addition to offering opportunities for employment beyond the capital cities, regional areas are increasingly attracting people for regional living and lifestyle benefits. As buyer’s agents, we continue to see that while overall growth has been strong, outcomes differ significantly by suburb and price point.
Investor vs Owner-Occupier Lending
Investor activity was one of the defining features of the 2025 market. New mortgage lending to investors accounted for around 40.6% of total lending over the year, the highest share since 2016. Recent data shows owner-occupier loan approvals were largely flat (up only about 1.7% in Q3), while investment loan approvals rose sharply by around 12.3%.
In practical terms, this meant investors were often outbidding first-home buyers and owner-occupiers. For buyers heading into 2026, competition may remain strong in popular and affordable segments. Our advice to owner-occupiers remains consistent: have finance pre-approved and be prepared to act decisively when the right property becomes available, particularly in auction-driven markets.
Affordable Stock Driving Growth
Much of the strongest capital growth over 2025 occurred in more affordable segments of the market. Kalbarri (WA), for example, recorded median house price growth of around 40% over the year, while Darwin’s Grey suburb saw unit prices rise by approximately 33%. By comparison, some premium markets lagged or declined, such as Kirribilli units in Sydney, which fell by around 15%.
Rental Prices and Returns
Overall, national rents increased approximately 5.0% in the year to November 2025, led by strong growth in the Darwin market with rental prices rising by approximately 8.6%. Despite this increase in rental prices nationally, gross rental yields still remain relatively low at around 3.6%. Therefore, rental income has not kept up with the increase in property prices.
Outlook and Buyer Tips for 2026
Looking ahead, APRA’s new debt-to-income cap of six times income is a precautionary measure that is unlikely to affect most buyers immediately. Many analysts expect price growth to moderate through 2026 as affordability constraints and inflation pressures continue to influence buyer behaviour. For buyers, this could translate into more choice and improved negotiating conditions compared to the fast-moving markets seen through much of 2025.
Ready to get started? At Key2dreamz, we guide both first-home buyers and investors through these changing market conditions. We’ll calculate your borrowing power, compare home loan options, and help you pick the right suburb. Call us on 61 439260917, visit our Key2dreamz website or book a free 30-minute consultation. Follow us on Instagram and connect on LinkedIn for regular market updates and tips.