There are only two capital cities left where the median house price is still under $1 million, but at the rate prices are rising, it may not be long before these cities join the million-dollar club too.
Australian home prices are now 9% higher than a year ago after values climbed 0.5% higher in February, according to the latest PropTrack Home Price Index.
The lift in prices came despite the Reserve Bank raising interest rates for the first time in two years last month after declaring inflation was too high once again.
Most capital cities and regional areas are now at record highs, while prices in Melbourne and Hobart remain slightly below previous price peaks.
The median capital city dwelling value — which combines both houses and units — has now cracked the $1 million mark for the first time, led by strong gains in the smaller capitals, which have boomed in recent years.
Perth's median house price rose by more than $180,000 in the past year. Picture: realestate.com.au/sold
PropTrack senior economist Eleanor Creagh said strong demand for affordable homes and a shrinking supply of homes on the market was accentuating price growth in the smaller capitals.
“The strongest conditions remain concentrated in markets where buyer demand is facing into tight supply, particularly Perth, Darwin, Brisbane and Adelaide,” she said.
How home prices changed around Australia in February
Perth remains the leader for price growth, with values rising a massive 19.5% in the past year.
The price of a typical Perth house has gone up $181,000 in the past year to $1.075 million.
The median unit price in Perth rose $128,000 to $690,000 over that same period, with values growing at a rapid 22.5% in that period as increasingly unaffordable prices push more buyers towards the more affordable property type.
Massive gains were also recorded in Brisbane, where the value of a typical house jumped about $166,000, or 14.6%, in just 12 months to a little over $1.2 million.
Brisbane is now the second-priciest capital behind Sydney, having risen through the house price rankings in recent years.
Much like Perth, unit prices in Brisbane are growing faster than houses, rising by 20.3% in the past year.
Ms Creagh said price growth for units had outpaced that of houses in the past quarter.
“This suggests demand may be shifting toward more affordable stock as borrowing capacity remains constrained,” she said.
Last frontiers of affordability begin to boom
The two smallest capitals at opposite ends of the country, Darwin and Hobart, still have median house prices below $1 million, but price growth in both cities has picked up considerably in the past year.
Darwin has staged a major turnaround, with the boom that was initially investor-led now broadening out.
Affordable property prices and high yields initially attracted interstate investors, but that added demand combined with a shortage of properties on the market has caused home prices across the board to surge.
Darwin is now one of the fastest growing capitals for home prices, with values boosted by surging investor demand. Picture: realestate.com.au/buy
Australia’s northernmost capital is still the most affordable with a median home value of just under $600,000.
House prices in Darwin have increased by 16.4% — a gain of more than $100,000 in just 12 months — while unit prices increased by 15.5%
That growth has given recent investors an instant equity boost, but real estate agent Darwin real estate agent Daniel Harris of Real Estate Central said the increased competition has made conditions more challenging for locals trying to get into the market.
“Prices can only go north in the current environment with such high demand and low supply,” he said.
Price growth in Hobart has picked up after a post-pandemic lull, particularly at the affordable end of the market where first-home buyers are competing with interstate investors. Picture: property.com.au
Meanwhile, prices in Hobart have been staging a quiet turnaround, with annual price growth now cracking the 10% mark for the first time since August 2022.
Hobart recorded the fastest price growth in February of all the capitals, with the 1% growth in values in February alone outpacing monthly rises in other fast-growing cities such as Perth, Adelaide and Brisbane.
Ms Creagh said this growth came amid a decline in the total number of homes on the market.
“Hobart has reaccelerated, recording the strongest monthly gain in February with total stock on market down around 30% over the past year,” she said.
Prices in the Tasmanian capital remain just 0.2% below the previous peak recorded in February 2022, which came off the back of rapid growth through the pandemic period before prices cooled at the beginning of the last rate rise cycle.
Demand heats up for affordable homes
Hobart’s relative affordability has been drawing more investors from the mainland, who are competing with first-home buyers and driving price growth for more affordable homes.
Hobart real estate agent Katrina Arkley of Arkley & Co said the rebound in prices since the lull in the market towards the middle of 2025 had lifted confidence among homeowners.
Interstate investors have been drawn to Hobart's more affordable northern suburbs. Picture: realestate.com.au/sold
“The higher end has slowed, but the lower end is definitely moving along nicely with the first-home buyer incentives that are available at the moment.”
“Supply has definitely increased in the last couple of months, but so have buyers.”
“In the northern suburbs we’ve had a lot of interstate buyers. Every day I’m contacted by about 20 buyers’ agents from interstate looking for properties under $600,000.”
Future growth dependent on rate rise path
Ms Creagh said further growth was expected in the year ahead, particularly in affordable markets where homes are in tight supply.
“The Reserve Bank’s February rate rise will weigh on borrowing capacity at the margin,” she said.
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“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.”
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