Australian Dwelling Prices Cool Down As 2025 Lands a Soft Finish, Says Westpac

MT Newswires Live01-06

Australian dwelling price growth has cooled, suggesting both buyers and sellers have pulled back after a soft finish to 2025, Westpac said on Monday.

The Cotality home value index grew 0.5% in December, reflecting further slowing momentum.

Home prices in the country surged 8.2% in 2025, leading to a cumulative rise of 25% since the 2022 correction. However, prices remain only 15% above their prior peak, after slightly lagging behind inflation over the last four years.

Sydney and Melbourne markets showed the most notable end-of-year slowdown, with initial estimates also pointing to lower turnover.

The bank said the slowdown in prices is concurrent with a "sharp turn" in interest rate expectations after higher-than-expected inflation readings.

The duration of the cooling effect on pricing remains highly uncertain due to seasonal factors.

"Performances will remain difficult to judge in January with conditions only likely to become clearer from mid-February on," Westpac commented.

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