Australia’s housing market is showing early signs of stabilisation, with Cotality’s August 2025 Housing Value Index reporting a modest 0.6% national increase in dwelling values through July. While this marks the sixth consecutive monthly rise, the pace remains measured and uneven, offering mixed signals for both homeowners and first-homebuyers. 

At a national level, housing values have now risen 3.7% over the past year, reflecting improved sentiment, stronger migration trends, and a continued mismatch between supply and demand. However, affordability constraints remain front of mind for many would-be buyers, particularly in cities where prices have already surged well beyond median household incomes.

For those already in the market, the latest figures may offer a sense of renewed confidence. Homeowners in Perth, Adelaide and Brisbane saw the strongest monthly gains–0.9% 0.7% and 0.7% respectively–while Sydney and Melbourne recorded more subdued increases of 0.6% and 0.4%. Regional markets also ticked higher, particularly in Queensland and Western Australia.

 However, Cotality’s data shows the market is far from uniform. Several areas are still seeing values fall or flatten, notably parts of regional Victoria and New South Wales. This reflects the complexity of today’s market, where lending conditions, interest rate expectations and local supply constraints are all pulling in different directions.

For first-home buyers, the outlook remains challenging. Despite some easing in growth rates, property values remain historically high in most capitals. At the same time, tight rental markets and rising rents are placing pressure on households trying to save for a deposit. Core fundamentals–such as low housing supply, population growth and a relatively resilient labour market–continue to support values in many areas, making meaningful price corrections unlikely in the near term.

That said, the current environment is not without opportunity. Buyers able to act with finance pre-approval and realistic expectations may find some negotiating power in pockets of slower market activity. Cotality also notes that new listing volumes are gradually increasing, which may ease some competition and broaden choice through the spring selling season.

From a policy and planning perspective, the report reinforces the need for long-term housing supply strategies. With building approvals still below pre-COVID levels and construction costs elevated, supply challenges are expected to persist–a factor that continues to underpin national housing values.

Overall, while Australia’s housing market is moving gradually upwards, conditions vary widely depending on location and property type. For those looking to enter the market, seeking expert guidance and understanding local dynamics remains essential.

The market is neither booming nor busting–and for many, that may be a welcome shift.

If you’re in need of property advice, find your nearest First National Real Estate member at www.firstnational.com.au

Monthly change in capital city home values