The latest PropTrack Home Price Index reported that home values now sit 3.94% higher than a year ago.
The increase was led by capital cities, where prices lifted 0.45%, while regional areas also saw gains of 0.28%. Both capital and regional home prices are now at all-time highs.
City-by-City Breakdown:
- Melbourne recorded the strongest growth in February, with prices rising 0.67%. Despite this, values remain 2.50% lower than a year ago.
- Sydney home prices climbed 0.50% to a record high, sitting 2.66% above last year’s levels, supported by improved affordability and renewed buyer confidence.
- Brisbane saw a 0.29% increase, keeping its position as one of the strongest-performing markets over the past year (+10.21%).
- Perth recorded a modest 0.02% rise but remains the top performer for annual growth (+13.12%).
- Darwin prices lifted 0.33% to a new peak, with house prices outperforming units over the past year.
- Adelaide rose 0.33% to a record high, with annual growth of 11.91%, though the pace of growth has slowed.
- Hobart was the only capital to record a decline (-0.03%), marking the third consecutive month of falls.
- Canberra saw a 0.20% increase but remains 0.33% below its February 2024 level.
According to REA Group Senior Economist, Eleanor Creagh, February’s home price rebound was driven by declining interest rates and renewed market confidence.
“National home prices rebounded as interest rates fell in February, reversing the soft start to the year.”
“Market sentiment has improved now that interest rates have started to move lower. The prospect of rate cuts had already buoyed sentiment, with clearance rates strengthening in every capital city in early February compared to the final months of 2024,” she said.
“February’s rate cut boosted borrowing capacities while improved affordability and buyer confidence have driven renewed demand and price growth, reversing the falls of recent months.”
Beyond interest rates, structural factors such as population growth and housing shortages continue to support price growth.
Looking ahead, Ms Creagh said prices are expected to continue lifting and interest rates are anticipated to fall further.
However, affordability challenges may temper growth.
“Poor affordability will likely dampen the uplift in prices compared to prior easing cycles, resulting in the pace of home price growth trailing the strong performance of recent years.”
