House Price Index (HPI) Australia 2025: Guide for Buyers & Investors

Australia’s property market is never far from the headlines, but behind the auction results and suburb spotlights lies a powerful tool: the House Price Index (HPI). In 2025, understanding the HPI is crucial for anyone looking to buy, sell, or invest in Australian real estate. Here’s how the HPI works, what’s driving it this year, and how you can use it to make smarter moves in the market.

What is the House Price Index (HPI)?

The House Price Index is a statistical measure that tracks changes in the price of residential properties over time. In Australia, the HPI is compiled by the Australian Bureau of Statistics (ABS) and other industry bodies, providing a benchmark for how property values are trending nationally and by capital city.

• HPI tracks broad trends: It’s not about individual properties, but rather the average movement across thousands of sales.

• Seasonally adjusted: The index smooths out seasonal variations, giving a clearer picture of underlying trends.

• Used by banks, policymakers, and investors: Lenders use HPI to assess mortgage risk, while the RBA considers it when setting interest rates.

Key Drivers of the HPI in 2025

This year, the Australian property market is shaped by a mix of economic, policy, and demographic forces. Here’s what’s pushing the HPI up—or pulling it down—in 2025:

• Interest Rate Movements: After a series of RBA hikes in 2023–24, rates have stabilised in early 2025, cooling rapid price growth seen in prior years.

• Government Incentives: The expanded First Home Buyer Support Scheme, now allowing for higher property price caps in Sydney and Melbourne, has brought new buyers into the market.

• Migration Rebound: With international borders fully reopened, Australia’s population growth has reignited housing demand, particularly in capital cities.

• Building Supply Constraints: Labour shortages and higher construction costs have limited new housing supply, keeping upward pressure on existing home prices.

According to ABS data released in March 2025, the national HPI rose by 3.8% year-on-year, with Brisbane and Perth outpacing Sydney and Melbourne for the first time since 2019.

How to Use the HPI as a Buyer or Investor

So, how can the HPI help you make better decisions?

• Timing Your Purchase or Sale: Tracking quarterly HPI updates can help you spot market cycles—buying on a dip or selling during a surge.

• Comparing Suburbs and Cities: ABS and CoreLogic break down HPI by region. For example, in 2025, Adelaide’s HPI grew by 5.1% while Hobart’s growth slowed to 1.2%—useful for investors hunting the next hotspot.

• Assessing Market Risk: Steep HPI increases may hint at overheating, while a flattening index can signal stabilisation or even an opportunity for buyers.

• Budget Planning: If you’re saving for a deposit, tracking the HPI helps you estimate how quickly prices are rising relative to your savings rate.

Example: Suppose you’re considering buying in Brisbane. The HPI shows a 6% annual rise in 2025, compared to a 2% rise in Sydney. This suggests Brisbane’s market is hotter, but may also mean more competition and potential for future cooling.

Recent HPI Trends and 2025 Outlook

Here’s a quick snapshot of where the HPI stands in 2025, based on the latest ABS and CoreLogic figures:

• National HPI: +3.8% year-on-year

• Brisbane: +6.0%

• Perth: +5.7%

• Sydney: +2.0%

• Melbourne: +1.8%

Market analysts expect moderate growth to continue through late 2025, especially in cities with strong population growth and tight rental markets. However, affordability pressures and stable interest rates could temper gains in high-priced markets.

Conclusion: Making the HPI Work for You

The House Price Index isn’t just a number for economists—it’s a window into Australia’s property pulse. Whether you’re a first-home buyer tracking your target suburb or an investor looking for the next upswing, keeping an eye on the HPI gives you a sharper edge in 2025’s dynamic market. Stay informed, compare trends, and let the data guide your property journey.