National median property price cracks $900,000

According to the Cotality Home Value Index (HVI), Brisbane, Adelaide, Perth, and Darwin hit new all time highs in December.

All four cities saw house prices rise by at least 1.5% through the month, Darwin the frontrunner at 2.1% growth.

Sydney and Melbourne prices declined slightly, but both remain within 1% of the all time highs of November 2025 and March 2022 respectively.

Cotality Research Director Tim Lawless said softening in the two largest markets suggests price growth may be a touch slower in 2026.

"A higher for longer setting on interest rates alongside a resurgence in cost-of-living pressures and worsening affordability pressures looks to have taken some heat out of the market," Mr Lawless said.

Regions outpace capitals

Once again, prices rose significantly more in regional parts of Australia compared to the capital cities.

In New South Wales, Victoria, South Australia, and Western Australia, the rest of the state saw house prices rise by more than the capital.

With more and more buyers priced out of the big cities, attention appears increasingly directed towards the more affordable markets.

Central Coast over Sydney is one example, while the standout from the latest HVI was Albany (about 420 kilometres south of Perth) where dwelling prices rose more than 23% in 2025.

The trend is backed up by the migration stats, the latest Regional Movers Index report showed city-to-regional relocations are now 19.8% above pre-pandemic averages.

Australians relocating from a capital city to a region made up 11.2% of all movement, compared to 8.9% in the opposite direction.

Rate hikes to curb growth?

A prolonged period with rates at 3.85% could mean slower price growth than if there were rate cuts, but if the RBA were to hike rates again it could be a more consequential headwind. 

The outlook for interest rates looks to have shifted, with rate cuts looking increasingly unlikely any time soon.

After the December RBA decision, Governor Michele Bullock suggested cuts could be off the table unless something changes.

"Given what's happening with underlying momentum in the economy, it does look like additional cuts are not needed," Ms Bullock told the assembled media.

Many observers now even expect a hike at the next meeting in February - the official prediction of CommBank along with ANZ and NAB.

Traders are less convinced, ascribing a 34% chance per the ASX RBA rate tracker (although that number is rising).

The February decision, as usual, is likely to be contingent on the inflation data that comes in from the ABS.

The November Consumer Price Index (CPI) is set for release on 7 January, while the December read should be out 28 January.

A significant change from the current annual inflation rate (3.3% over the twelve months to October) would likely shift the RBA's thinking.