The winners and losers in Australian residential real estate in 2025
Australia’s housing market rebounded sharply in 2025, with lower-value suburbs and resource regions driving growth as rate cuts, tight supply and renewed competition reshaped the year.
By Staff Writer
Fri, Dec 19, 2025 1:35pm 5min
First time homebuyers are using a variety of strategies to get on the property ladder.
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.
National dwelling values are set to close 2025 at least eight per cent 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,” Ms Owen said.
Three rate cuts, an expansion of the 5% Home Guarantee Deposit Scheme and persistently low listing volumes helped drive the recovery, with the housing market recording three consecutive months of growth of at least 1% by November and reaching a new high of $12 trillion.
Owen said the turnaround was most visible across lower-value markets and regions where buyers were able to respond quickly to more favourable credit conditions.
“Tight supply meant even modest demand created upward pressure on prices. Cheaper markets were had the most acceleration because they remained within reach for buyers navigating higher living costs,” she said.
Prestige Sydney remains Australia’s price leader
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.
Point Piper led the national list with a median house value of $17.3 million and unit medians above $3.1 million, followed by long-established areas such as Bellevue Hill, Vaucluse,
Tamarama and Rose Bay.
Owen 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.
Mosman recorded the highest total value of house sales nationally at $1.58 billion across 229 transactions, underlining the scale of turnover even in a year of strained serviceability.
Lower-value suburbs delivered the strongest gains
Western Australia dominated high house value growth in 2025, with Kalbarri increasing 40.2% to $515,378 followed by Rangeway (32.2%) and Lockyer (32.0%).
Similar trends emerged in the unit market, with strong results concentrated in Queensland’s mid-priced regions such as Cranbrook (up 29.3%) and Wilsonton (up 26.9%).
Ms Owen said the performance of these markets highlighted the role of affordability at a time of constrained borrowing power.
“Lower value areas offered buyers an opportunity to get into the market if they had the capacity to service a mortgage. Once interest rate cuts started to flow through, demand lifted
quickly in those areas where prices had further room to grow,” she said.
“Investors were a particularly strong driver of demand in markets across WA and QLD, where the share of new mortgage lending to investors reached 38.3% and 41.1%
respectively.”
Perth, Brisbane and Darwin lead capital-city upswing
Darwin posted the strongest rise among the capitals at 17.1% through the year-to-date, following a flat result in 2024, joined by Brisbane and Perth as Australia’s three top-performing capital cities.
The fastest growing capital-city suburb for houses was Mandogalup in Perth (up 33.0% to $944,609), alongside several outer Darwin suburbs where more moderate entry points below $600,000 supported stronger value growth.
The most affordable capital-city suburbs for houses were clustered around Greater Hobart, including Gagebrook, Herdsmans Cove and Bridgewater, all with medians under $450,000.
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.
Biggest gains and the steepest falls in regional Australia
Strong upswings in WA and Queensland contrasted with declines in other regional pockets.
House values fell 11.6% in Millthorpe (NSW) and 10.5% in Tennant Creek (NT) while several unit markets recorded annual declines, including South Hedland (down 14.1%) and Mulwala (down 11.8%).
Owen said these differences reflected the uneven backdrop of supply levels, migration flows and localised demand.
“Some regional areas are still benefiting from relative affordability and tight rental conditions.
Others are adjusting to earlier periods of rapid growth or shifts in local economic activity,” she said.
Mining towns produced the highest yields
Rental demand remained firm across key resource corridors in regional WA and parts of regional Queensland, where constrained supply, strong employment bases and short-stay
workforces contributed to some of the highest yields in the country.
Newman, in the Pilbara, delivered the strongest house yields at 12.6%, reflecting demand linked to iron ore operations, Kambalda East, near the Goldfields mining belt, followed at
12.2%, supported by nickel and gold activity.
Unit yields were even stronger, with South Hedland leading the country at 17.8%, while Newman recorded 14.3% and Pegs Creek recorded 13.2%, as apartment stock is limited
and worker demand remains consistent.
Pegs Creek, located in Karratha, recorded a 23.5% increase in house rents over the year and Rockhampton City recorded a 21.1% jump in unit rents.
Constraints to shape 2026
Market conditions are expected to be more restrained in 2026 as borrowing capacity, affordability and credit assessments place limitations on demand.
National listings remain 18% below the five-year average and new housing completions continue to trail household formation, maintaining the structural imbalance that supported
stronger conditions in 2025.
Owen said that imbalance alone is not enough to drive the same level of growth next year.
“Supply remains tight, but the demand environment is shifting. Inflation forecasts have been revised higher, interest rate expectations have adjusted with them, and households are
facing stricter borrowing assessments. Those factors can temper buyer activity even when stock levels are low,” she said.
“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.”
Key findings – Cotality Best of The Best (BoB) 2025
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 transacted 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 the highest in Rockhampton (QLD), up 21.1%.
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Everyone Wants a Room Where They Can Escape Their Screens
Weary of ‘smart’ everything, Americans are craving stylish ‘analog rooms’ free of digital distractions—and designers are making them a growing trend.
By NORA KNOEPFLMACHER
Tue, Jan 13, 2026 5min
James and Ellen Patterson are hardly Luddites. But the couple, who both work in tech, made an unexpectedly old-timey decision during the renovation of their 1928 Washington, D.C., home last year.
The Pattersons had planned to use a spacious unfinished basement room to store James’s music equipment, but noticed that their children, all under age 21, kept disappearing down there to entertain themselves for hours without the aid of tablets or TVs.
Inspired, the duo brought a new directive to their design team.
The subterranean space would become an “analog room”: a studiously screen-free zone where the family could play board games together, practice instruments, listen to records or just lounge about lazily, undistracted by devices.
For decades, we’ve celebrated the rise of the “smart home”—knobless, switchless, effortless and entirely orchestrated via apps.
But evidence suggests that screen-free “dumb” spaces might be poised for a comeback.
Many smart-home features are losing their luster as they raise concerns about surveillance and, frankly, just don’t function.
New York designer Christine Gachot said she’d never have to work again “if I had a dollar for every time I had a client tell me ‘my smart music system keeps dropping off’ or ‘I can’t log in.’ ”
Google searches for “how to reduce screen time” reached an all-time high in 2025. In the past four years on TikTok, videos tagged #AnalogLife—cataloging users’ embrace of old technology, physical media and low-tech lifestyles—received over 76 million views.
And last month, Architectural Digest reported on nostalgia for old-school tech : “landline in hand, cord twirled around finger.”
Catherine Price, author of “ How to Break Up With Your Phone,” calls the trend heartening.
“People are waking up to the idea that screens are getting in the way of real life interactions and taking steps through design choices to create an alternative, places where people can be fully present,” said Price, whose new book “ The Amazing Generation ,” co-written with Jonathan Haidt, counsels tweens and kids on fun ways to escape screens.
From both a user and design perspective, the Pattersons consider their analog room a success.
Freed from the need to accommodate an oversize television or stuff walls with miles of wiring, their design team—BarnesVanze Architects and designer Colman Riddell—could get more creative, dividing the space into discrete music and game zones.
Ellen’s octogenarian parents, who live nearby, often swing by for a round or two of the Stock Market Game, an eBay-sourced relic from Ellen’s childhood that requires calculations with pen and paper.
In the music area, James’s collection of retro Fender and Gibson guitars adorn walls slicked with Farrow & Ball’s Card Room Green , while the ceiling is papered with a pattern that mimics the organic texture of vintage Fender tweed.
A trio of collectible amps cluster behind a standing mic—forming a de facto stage where family and friends perform on karaoke nights. Built-in cabinets display a Rega turntable and the couple’s vinyl record collection.
“Playing a game with family or doing your own little impromptu karaoke is just so much more joyful than getting on your phone and scrolling for 45 minutes,” said James.
The Patterson family’s basement retreat ‘encapsulates the joy in the things that we love in one room.’ John Cole
Screen-Free ‘Escapes’
“Dumb” design will likely continue to gather steam, said Hans Lorei, a designer in Nashville, Tenn., as people increasingly treat their homes “less as spaces to optimise and more as spaces to retreat.”
Case in point: The top-floor nook that designer Jeanne Hayes of Camden Grace Interiors carved out in her Connecticut home as an “offline-office” space.
Her desk? A periwinkle beanbag chair paired with an ottoman by Jaxx. “I hunker down here when I need to escape distractions from the outside world,” she explained.
“Sometimes I’m scheming designs for a project while listening to vinyl, other times I’m reading the newspaper in solitude. When I’m in here without screens, I feel more peaceful and more productive at the same time—two things that rarely go hand in hand.”
A subtle archway marks the transition into designer Zoë Feldman’s Washington, D.C., rosy sunroom—a serene space she conceived as a respite from the digital demands of everyday life.
Used for reading and quiet conversation, it “reinforces how restorative it can be to be physically present in a room without constant input,” the designer said.
Laura Lubin, owner of Nashville-based Ellerslie Interiors, transformed a tiny guest bedroom in her family’s cottage into her own “wellness room,” where she retreats for sound baths, massages and reflection.
“Without screens, the room immediately shifts your nervous system. You’re not multitasking or consuming, you’re just present,” said Lubin.
As a designer, she’s fielding requests from clients for similar spaces that support mental health and rest, she said.
“People are overstimulated and overscheduled,” she explained. “Homes are no longer just places to live—they’re expected to actively support well-being.”
Designer Molly Torres Portnof of New York’s DATE Interiors adopted the same brief when she designed a music room for her husband, owner of the labels Greenway Records and Levitation, in their Lido Beach, N.Y. home. He goes there nightly to listen to records or play his guitar.
The game closet from the townhouse in “The Royal Tenenbaums”? That idea is back too, says Gachot. Last year she designed an epic game room backed by a rock climbing wall for a young family in Montana.
When you’re watching a show or on your phone, “it’s a solo experience for the most part,” the designer said. “The family really wanted to encourage everybody to do things together.”
Photo: John Cole
Analog Accessories
Don’t have the space—or the budget—to kit out an entire retro rec room?
“There are a lot of small tweaks you can make even if you don’t have the time, energy or budget to design a fully analog room from scratch,” said Price.
Gachot says “the small things in people’s lives are cues of what the bigger trends are.”
More of her clients, she’s noticed, have been requesting retrograde staples, such as analog clocks and magazine racks.
For her Los Angeles living room, chef Sara Kramer sourced a vintage piano from Craigslist to be the room’s centerpiece, rather than sacrifice its design to the dominant black box of a smart TV. Alabama designer Lauren Conner recently worked with a client who bought a home with a rotary phone.
Rather than rip it out, she decided to keep it up and running, adding a silver receiver cover embellished with her grandmother’s initials.
Some throwback accessories aren’t so subtle. Melia Marden was browsing listings from the Public Sale Auction House in Hudson, N.Y. when she spotted a phone booth from Bell Systems circa the late 1950s and successfully bid on it for a few hundred dollars.
“It was a pandemic impulse buy,” said Marden.
In 2023, she and her husband, Frank Sisti Jr., began working with designer Elliot Meier and contractor ReidBuild to integrate the booth into what had been a hallway linen closet in their Brooklyn townhouse.
Canadian supplier Old Phone Works refurbished the phone and sold them the pulse-to-tone converter that translates the rotary dial to a modern phone line.
The couple had collected a vintage whimsical animal-adorned wallpaper (featured in a different colourway in “Pee-wee’s Playhouse”) and had just enough to cover the phone booth’s interior.
Their children, ages 9 and 11, don’t have their own phones, so use the booth to communicate with family. It’s also become a favorite spot for hiding away with a stack of Archie comic books.
The booth has brought back memories of meandering calls from Marden’s own youth—along with some of that era’s simple joy. As Meier puts it: “It’s got this magical wardrobe kind of feeling.”