Australia’s housing market staged a turnaround in 2025, defying intense affordability and cost of living pressures to deliver an above decade-average growth rate of 7.7% through the year-to-date.
Cotality’s annual Best of the Best report, a detailed nationwide breakdown of the suburbs that rose fastest, had the highest rent return or offered the most accessible
entry points, identifies which markets led the year’s recovery.
Key findings include:
Lower-value suburbs: delivered the strongest value gains, led by Kalbarri (WA), up 40.2% for houses, and Cranbrook (Qld), up 29.3% for units.
Sydney’s premium suburbs: remained the country’s highest value markets, with Point Piper recording a house median of $17.3 million and unit median of more than $3.1 million.
Mosman: recorded the highest total value of house sales nationally, with $1.58 billion transacting across 229 sales.
WA’s resource-linked towns: produced the nation’s strongest rental yields, with Newman at 12.6% for houses and South Hedland at 17.8% for units.
Pegs Creek (WA): had the highest annual house rent increase at 23.5%, unit rents rose highest in Rockhampton (QLD) up 21.1%.
National dwelling values are set to close 2025 at least 8% higher, a result Cotality Australia Head of Research Eliza Owen says highlights how quickly conditions shifted after a challenging start.
“Markets entered 2025 under considerable pressure,
"Affordability had hit a series high, serviceability was stretched and price growth had flattened out,
"What followed was an unexpectedly strong rebound as interest rate cuts, easing inflation and limited supply reignited competition,” Eliza said.
Sydney’s top-end suburbs sat in their own price bracket in 2025, widening the gap between premium enclaves and the rest of the country.
Suburbs in Adelaide and Darwin provided some of the best value for unit buyers, with medians ranging from less than $250,000 in Hackham, Adelaide to $328,416 for Karama in Darwin.
Eliza said the resilience of premium Sydney markets was in sharp contrast to affordability pressures elsewhere.
“Affordability constraints were a defining feature of 2025, yet premium markets continued to operate on their own cycle.
"These suburbs are far less sensitive to borrowing costs and listing trends, which is why their performance often diverges from the broader market,” she said.
Market conditions are expected to be more restrained in 2026 as borrowing capacity, affordability and credit assessments place limitations on demand.
"Inflation forecasts have been revised higher, interest rate expectations have adjusted with them,
"Those factors can temper buyer activity even when stock levels are low,
“Lower value markets may still outperform because they carry less sensitivity to credit constraints, but overall growth is likely to be more measured compared with 2025,” she concluded.
