Overview
- Housing market resilience: Over the past 40 years, Australia’s property values have often surged under unexpected conditions, such as high interest rates or global crises.
- Standout growth years: The strongest years include 1988 (+31.2%), 2021 (+24.5%), and early 2000s peaks, highlighting that factors beyond monetary policy—like fiscal stimulus and migration—drive outcomes.
- Long-term trends: Only six periods of decline occurred in four decades, and 2025 ranked 11th highest for annual growth, reinforcing the market’s historical strength.
History shows property value growth sometimes defies expectations
A forty-year retrospective on growth in home values from Cotality reveals that Australia’s housing market has a long history of defying conventional wisdom, with periods of extraordinary growth occurring under unexpected conditions.
From soaring values during high-interest-rate environments to surges amid global crises, the data underscores that housing performance is shaped by more than monetary policy alone.
“Sometimes home values surge when you least expect it,” said Tim Lawless, Cotality’s Research Director.
“In 1988, with interest rates near 15% and rising, Australian home values skyrocketed by 31%.”
“Fast forward to 2021, amid a global pandemic and closed borders, national values jumped almost 25%.”
“These standout years remind us that housing markets are influenced by more than just interest rates. Fiscal stimulus, credit availability, migration trends and economic shocks all play a role in shaping outcomes.”
In order of growth, the top growth years over the past four decades are:
- 1988: 31.2%
- 2021: 24.5%
- 2003: 18.1%
- 2001: 15.9%
- 1987: 15.3%
Compared to other years, 2025 ranked the 11th highest calendar year for value growth over the past forty years.
“Periods of extreme growth often coincide with broader economic shifts, not just monetary policy,” added Lawless.
“Over the past forty years, there have only been six periods when home values have fallen.”
Other highlights from the January Housing Chart Pack include:
- Australia’s residential real estate total market value rose to $12.3 trillion in December.
- National dwelling values rose 2.9% over the quarter and 8.6% annually, adding an estimated $71,360 to the median Australian dwelling value in 2025.
- The monthly pace of growth was easing across most regions through December, with the trend continuing into the early months of 2026. Sydney and Melbourne home values were down .01% over the four weeks ending January 8th, while other state capitals lost steam.
- Most capitals are seeing the strongest growth conditions across the lower quartile of the value range, reflecting intense competition for properties with a more affordable price point.
- Cotality estimates that almost 561,000 sales have transacted in 2025, a 4.9% increase on 2024 and 7.2% higher than the five-year average.
- Median time on market was 27 days nationally, down from 29 days a year ago, with capital city homes selling fastest in Perth (nine days) and slowest in Canberra (37 days) and Darwin (35 days).
- While new listings have trended roughly in line with historic averages since mid-September, total advertised stock nationally was 15.8% lower than a year ago in December and 20.6% below the five-year average for this time of the year.
- The flow of new listings showed the largest rise across Melbourne, up 15.5% on a year ago in December, with Sydney also showing a substantial 11.6% increase in new listings relative to a year ago.
- Nationally, rents lifted 5.2% in 2025, a step up from the 4.8% rise recorded in 2024, but well below the 8%+ annual increase in rents recorded between 2021 and 2023.
- Rents have increased across every broad region of Australia, ranging from a 10.1% jump in regional WA to a 2.9% increase in Melbourne.
