Capital city house prices pass $1m as growth diverges

Real estate platform REA Group’s PropTrack Index has recorded a 0.5 per cent increase in the median house price across the capital cities for February, lifting the overall median value to $1,004 million.

Data analytics firm Cotality’s Home Value Index ticked over $1 million at the end of January, but median values have still grown by 0.6 per cent in February to $1,014 million.

As of 28 February 2026, Cotality found that median house values have grown by 0.8 per cent over the month, 2.1 per cent over the quarter, and 9.9 per cent over the year. The national median house price is now $922,838.

For the combined capitals, median prices have grown by 1.8 per cent over the quarter and 9.6 per cent over the year.

Similarly, REA Group’s PropTrack Index saw capital city median prices grow 0.5 per cent over the last month and 8.6 per cent over the last year. Nationally, the index recorded a 0.5 per cent increase monthly and 9.1 per cent annually.

Multi-speed price growth

While every capital city and broad rest-of-state region recorded an increase in home values through the month, the start of the year returned a mixed result.

As they did at the end of 2025, Sydney and Melbourne weighed on the headline numbers, recording a monthly increase of 0 per cent, according to Cotality. Quarterly, Sydney and Melbourne’s median prices have marginally contracted, recording growth of -0.1 per cent and -0.4 per cent, respectively.

For the year, Sydney’s median prices have grown by 6 per cent, while Melbourne’s have grown by 4.7 per cent.

While Sydney and Melbourne flatlined in February, the midsized capitals continued to record a solid rate of gain, with more than 1 per cent month-on-month growth.

Tim Lawless, Cotality’s research director, said that while Sydney and Melbourne have traditionally led Australia’s housing cycles, there have also been periods where the market has moved in a countercyclical way.

“The clear slowdown in housing conditions across Sydney and Melbourne could signal an easing in growth conditions elsewhere down the track, but for now, the mid-sized capitals continue to see support from extremely low inventory levels, which is boosting the growth in values,” Lawless said.

Perth is showing the strongest trend, with home values jumping 2.3 per cent in February, adding more than $22,500 to the median dwelling value over the month. Brisbane, Adelaide, and Hobart have also recorded a rise of more than 1 per cent in February.

In the four weeks to 22 February, Perth listings remained 48 per cent below their five-year average, with Brisbane 31 per cent below and Adelaide 23 per cent lower.

Broker Daily has recently reported on how housing supply in Perth remains at historic lows, despite demand surging.

Cotality’s data also showed that the more affordable end of the market is still delivering some strength. In Sydney, for example, lower quartile house values were up 0.8 per cent over the month, while upper quartile house values dropped 0.9 per cent. The same trend, to different extents, is evident across each of the capital cities.

“There is a lot of competition for lower-priced properties,” Lawless said.

“First home buyers, investors and subsequent buyers are all competing across this sector of the market, while credit is less available across the higher price points due to serviceability constraints.”

Regions v capitals

Regional markets are showing a similar trend, outperforming the capitals across NSW, Victoria, South Australia, and Tasmania.

Overall, regional house prices outpaced the capitals with month-on-month price growth of 1.1 per cent, quarterly growth of 3.2 per cent, and annual growth of 11.1 per cent. Median regional house prices are now $751,327.

Cotality said that demand is more resilient thanks to lower price points and evidence of rising internal migration rates.

Looking forward

Analysts said that the future outlook for house prices remains uncertain.

Shane Oliver, chief economist for AMP, said that he expects home price growth to slow further into the year.

“The combination of the lagged effect of last year’s rate cuts, the expanded Five per cent deposit scheme and the Help to Buy scheme and the ongoing shortage of housing are likely to keep the upswing in property prices going this year,” said Oliver.

“However, the pace of gains is likely to slow further from that seen in 2025 as the interest rate outlook has turned from rate cuts to rate hikes and affordability now being worse than ever.”

Similarly, REA Group senior economist Eleanor Creagh said: “The Reserve Bank’s February rate rise will weigh on borrowing capacity at the margin, but tight labour market conditions, population inflows, investor activity and the expanded Home Guarantee Scheme have reinforced demand, with limited new housing supply providing a floor under prices. These factors point to further price gains.

“Though, the period ahead is likely to see slower and more uneven growth as affordability constraints and future rate rises slow growth throughout 2026.”

[Related: 1 in 4 mortgage holders unprepared for rate hikes]