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The latest PropTrack report, released on Monday, showed prices rose 0.1 per cent over the month and climbed 8.8 per cent across 2025.

Sydney and Melbourne ease at year end

Home prices in Sydney and Melbourne both declined by 0.3 per cent in December, marking a softer finish to the year for Australia’s two largest housing markets.

Despite the monthly falls, prices in both cities remained well above year-earlier levels. Sydney’s median home value reached $1.24 million after annual growth of 6.4 per cent, while Melbourne recorded a median of $854,000 following a 4.5 per cent rise over the year.

Strong momentum in Brisbane, Adelaide and Perth

Brisbane’s housing market continued to surge, with the median home price tipping above $1 million to $1.01 million after annual growth of 14.6 per cent.

Adelaide was the strongest-performing capital city in December, recording a 0.8 per cent monthly increase to a median of $908,000. Prices in the South Australian capital rose 12.8 per cent over the year.

Perth also delivered robust gains, rising 0.5 per cent over the month to a median value of $950,000, supported by annual growth of 17.2 per cent.

Regional markets outperform over the year

Regional housing markets continued to outperform capital cities throughout 2025, recording stronger price growth both over the month and across the full year.

PropTrack found regional prices rose 0.4 per cent in December and delivered higher annual growth than capital city markets, reflecting ongoing demand pressures and tighter supply conditions.

Growth expected to slow across 2026

REA Group senior economist and report author Anne Flaherty said national home prices were likely to reach further highs in 2026, though the pace of growth was expected to moderate.

“Home prices are predicted to head to new highs in 2026, however, the pace of growth is expected to slow,” she said.

“Price growth in 2025 was supported by three rate cuts.”

With no further interest rate cuts currently anticipated this year, Ms Flaherty said there remained a risk rates could rise if domestic inflation proved persistent.

Supply shortages and policy settings remain key

Ms Flaherty said limited housing supply and sustained demand were likely to continue supporting prices, potentially offsetting the impact of any interest rate increases by the Reserve Bank of Australia.

She also pointed to the federal government’s five per cent deposit scheme as a factor likely to underpin demand, particularly at the more affordable end of the market.

“The Australian government’s five per cent deposit scheme is also likely to support price growth by driving up demand, particularly at the more affordable end of the market,” she said.

Rising construction costs and ongoing labour shortages across the building sector are also expected to keep new housing supply well below what is required, placing continued upward pressure on prices.

Other data confirms strong year for housing

Separate figures released by PropTrack rival Cotality on Friday showed Australian home values rose 8.6 per cent in 2025, adding around $71,400 to the national median dwelling value.

It marked the strongest calendar-year increase in home values since 2021, when prices surged 24.5 per cent amid emergency low interest rates and heightened demand during the pandemic.

Sydney, 5 January 2026: Sydney Metro has today announced the appointment of Lendlease, Mirvac and Coombes Property Group as development and delivery partners for the new Hunter Street metro precinct, marking another significant step forward in the delivery of Sydney Metro West.

The project will deliver a landmark metro station and two over station developments in the commercial heart of Sydney’s CBD.

Lendlease, Mirvac and Coombes Property Group bring together leading expertise in station delivery, commercial development and placemaking to deliver what will be one of Sydney’s most transformative urban projects.

Lendlease in partnership with Sydney Metro will deliver the new Hunter Street Station which will become a central nexus of the Metro West network, connecting Barangaroo, Wynyard, Hunter Street and Martin Place. Set to be one of the busiest stations on the Metro West line, Hunter Street Station is expected to see more than 15,000 people move through the station every hour in the morning peak, with that number to increase to more than 30,000 by 2061.  

The precinct will also feature two commercial towers above the station entrances – one to the west on the corner of George and Hunter Streets delivered by Lendlease and the second to the east on O’Connell and Hunter Streets delivered jointly by Mirvac and Coombes Property Group. Each tower will be activated by retail and hospitality offerings, alongside high-quality public spaces and laneways that create a destination for work, culture and connection.  

Lendlease is expected to commence construction of the station’s main works in late 2026, with the station scheduled to open in 2032 in line with the opening of Metro West services. The over station developments are targeted to complete following the station opening. 

Quotes attributable to Tom Mackellar, CEO Development, Lendlease 

“Lendlease brings extensive experience in delivering city shaping, integrated station developments, including Metro Martin Place and Victoria Cross, and will apply that expertise to set new benchmarks for transport-led precincts with the delivery of the Hunter Street project.

“We’re looking forward to working with Sydney Metro to deliver a seamlessly connected destination that integrates workplaces, retail and public spaces, creating long-term economic and social value for Sydney.”

Quotes attributable to Stuart Penklis, CEO Development, Residential & Commercial Mixed Use, Mirvac

“We are thrilled to partner with Coombes Property Group to deliver one of the two landmark office towers, which will redefine the Sydney CBD office market and set a new standard for premium workplaces.

“Directly connected to the new Hunter Street Metro Station, the building offers unrivalled accessibility and is designed to achieve the highest sustainability ratings, including Platinum WELL. Leveraging our ability to deliver premium office developments, this will be a future focused workplace that brings together cutting edge design, technology and environmental performance in the heart of the CBD.”

Quotes attributable to Michael Coombes, CEO, Coombes Property Group

“Coombes Property Group is proud to be co-owner and co-developer of the East Over Station Development at Hunter Street alongside Mirvac, to deliver one of the most significant city-shaping projects in Sydney’s CBD. 

“The precinct will contribute meaningfully to the city – creating enduring commercial space, high-quality public amenity and a connected destination that serves the workforce and wider community. Working alongside Grimshaw Architects, we are delivering a premium, sustainable workplace directly connected to the new Metro at the heart of Sydney’s commercial core.” 

For more information:

Lendlease
Ashley Chrysler
Senior Manager External Affairs – NSW/ACT/QLD
ashley.chrysler@lendlease.com
+61 472 653 297

Coombes Property Group
Jayitri Smiles at Keep Left, on behalf of Coombes
jsmiles@keepleft.com.au
+61 468 914 627