On the eve of an expected rate rise by the Reserve Bank (RBA) the growth in home prices has continued.
But for how much longer is now the question.
Australian home values rose by 0.8 per cent in January according to Cotality’s Home Value Index, which the property data company described as a “subtle acceleration” from the 0.6 per cent increase in December.
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Home prices in regional Australia also rose in January, up 1 per cent in January compared to a 0.7 per cent increase across the capital cities.
Nationally, dwellings which covers both houses and units, stood at $912,465 according to Cotality data.
It continued a trend of growth in property prices in regional Australia outpacing that of capital cities.
Prospect of rate hikes
The prospect of rate hikes this week has failed so far to dampen prices, Cotality Research Director Tim Lawless noted.
“Despite the most unaffordable conditions on record in many cities, along with a rebound in cost of living pressures and prospect of a rate hike as early as this Tuesday, we are still seeing a broad-based rise in housing values,” Mr Lawless said.
“Affordability and serviceability constraints are likely to naturally dampen demand, but also renewed cost of living pressures and a strong chance that interest rates will rise. There is also slowing population growth to consider.”
He noted that the number of homes up for sale had dropped.
In January the number of homes advertised for sale was 19 per cent below levels at the same time last year. Pic: Shutterstock Credit: View
Cotality estimates the number of homes advertised for sale was 19 per cent below levels at the same time last year, and 25 per cent below the five-year average for this time of year.
He said the low inventory saw prices continued to rise.
“The ongoing capital gains reflect persistently low inventory in the face of above average housing demand, however we are likely to see demand side pressures gradually ease in 2026.”
In a separate report, real estate group Ray White also reported that prices were on the rise in January, with national house prices rising to $973,000 and unit prices to $746,000.
“The strength in January comes despite growing concern that interest rates may rise again at the Reserve Bank’s upcoming meeting,” Ray White Group chief economist Nerida Conisbee said.
“What stands out in the January data is that higher rate expectations do not yet appear to have been priced into the market.
“Price growth remained broad-based over summer, suggesting buyers continued to transact as though borrowing costs would remain unchanged.”
She said this was a different scenario to this time in 2025.
“This is a clear contrast to the start of last year, when expectations of rate cuts began influencing behaviour as early as January, well before the first reduction was delivered in February.”
Cheapest properties rising most
When it comes to both capital and regional cities, it is homes at the lower end in price that are seeing the most growth according to Cotality data.
“This trend of stronger growth conditions at lower price points is supported by intense competition for more affordable houses,” Mr Lawless said.
“This is where first home buyers, investors and, progressively, mainstream demand is most concentrated.”
In the Illawarra, the Dapto corridor, which is dominated by new development popular with first home buyers house prices rose 1.1 per cent taking them to a median price of $938,087.
In contrast, Wollongong which encompasses more established and high-end beachside suburbs house prices rose by 0.6 per cent, with the median price now at $1.335 million.
Where have prices reached their peak
Home prices in Australia’s two largest cities, Sydney and Melbourne, are below their peak, along with Canberra and Hobart.
It is the mid-size capital cities Brisbane, Adelaide and Perth, along with the smaller Darwin where property prices reached their peak in January.
Regionally property prices are at their peak across large swathes of the country.
Regional NSW, Queensland, South Australia, Western Australia and Tasmania all saw property prices reach their peak in January.
The greatest rises in the past year, across both city and country, has occurred in WA.
Perth home prices have risen by 18.5 per cent since February 2025, while prices in regional WA have risen by 16.6 per cent.
