According to the PropTrack Home Price Index, regional areas experienced a 0.4% increase in home prices over the month, while combined capital cities remained steady. Adelaide led the capital cities with a 0.8% rise in December, contributing to an annual increase of 12.8%. Brisbane and Perth followed, each recording a 0.5% monthly growth. In contrast, Sydney and Melbourne saw slight declines of 0.3% in December, though their prices remained higher than a year ago.
Several factors have contributed to this upward trend in home prices. Limited housing supply continues to be a significant driver, as the construction of new homes has not kept pace with demand. Additionally, the Australian Government's 5% Deposit Scheme has bolstered demand, particularly among first-time buyers, by reducing the initial financial barrier to homeownership.
Looking ahead, while home prices are predicted to reach new highs in 2026, the pace of growth is expected to slow. The previous year's price growth was supported by three interest rate cuts; however, no further cuts are anticipated this year. In fact, there is a possibility of rate increases if inflation persists. Despite this potential headwind, the combination of limited new housing supply and sustained demand is likely to continue supporting price growth.
For prospective buyers, these market dynamics underscore the importance of staying informed and prepared. Understanding regional variations in price trends and being aware of government schemes can provide valuable opportunities in navigating the housing market.
