Capital gains: swings, round-abouts, and hidden gems
Buyers’ feeling about the Australian real estate market in general may be overwhelming and out of reach, but there are still some bargains to be found. The experts explain:
IT’S plainly been a huge year in real estate with median Australian housing values up 7.5 per cent in 2025 and residential real estate now worth $12.2 trillion.
But Cotality’s December Housing Chart Park reveals some perhaps hidden opportunities for the canny investor.
Most capital cities are at record highs, notably Sydney, Brisbane, Adelaide, Darwin and Perth.
Darwin posted a whopping 17% annual rise in dwelling values, Perth 13.1% and Brisbane 12.8%. Sydney and Adeliade were up 5.1% and 8.2% respectively.
Melbourne, Hobart and Canberra improved by 4-5% but are now below their record highs seen in 2022.
According to Cotality, Melbourne is 0.9% below the record high of March 2022. Hobart is down 6.9% on that same month, and Canberra is 2.4% below its May 2022 peak.
This reinforces comments by real estate guru John McGrath in AC’s latest Settlement Day podcast that Melbourne could be a sleeper.
“I think if you’re looking for value, if you want to make money in the next three or four years, Melbourne is probably the best place,” he said.
Cotality noted a general slowing in the final weeks of 2025, saying “The pace of growth in national home values has lost some steam through December to date.
“The decline was led by Sydhey, with the four-week growth trend moderating from 0,.5% to 0.1%, while Melbourne’s rate of growth has eased slightly from 0.3% at the end of November to 0.2%.
“Meanwhile the midsized capitals continue to power ahead, with values in Perth, Adelaide and Brisbane up 2.2%, 1.9% and 1.7% respectively.”
Rents remain strong, up 5% nationally over the year to November.
“Most capitals have recorded an acceleration in the annual pace of rental growth through the second half of the year,” Cotality reported.
“Adelaide is the exception, with its rental growth rate easing from 4.7% over the year to May, to 3.7% over the 12 months to November.”
