Australia’s Quiet Boom: How Falling Rates Are Driving a Property Price Revival in Unexpected Places

A Market on the Move

After years of mixed performance and buyer hesitation, the Australian property market has turned a critical corner. Triggered by the Reserve Bank of Australia’s first rate cut in four years, prices are now rising rapidly—especially in previously lagging or overlooked areas like inner Melbourne, Darwin, and Townsville. In just three months, property values in some suburbs have jumped nearly 6%, a signal to buyers, investors, and developers alike: momentum has returned, and it’s moving fast.

Melbourne Reawakens: The Underdog Takes the Lead

For years, Melbourne’s inner-city market struggled to shake off pandemic-induced malaise, weakened investor confidence, and regulatory disincentives. But that has all changed since the February rate cut. According to PropTrack, inner Melbourne recorded the strongest quarterly growth in both houses (3.6%) and units (5.9%), outperforming every other major region across Australia.

REA Group’s Anne Flaherty says affordability is the driving force: “Home prices have underperformed the rest of the country so much and are now cheaper than Brisbane, Adelaide, and on track to be cheaper than Perth.” With sentiment improving and unit prices finally showing positive annual growth, buyers are returning, and demand is climbing fast.

From Stagnation to Surge: Why Inner Melbourne Units Are Booming

High rental prices, declining mortgage rates, and a growing buyer base are fuelling Melbourne’s resurgence—especially in the unit market. Agent Andrew Crotty confirms the trend: “Last year the investors were getting out... but now we are noticing they are re-entering the market, particularly with units.” Many first-home buyers and young couples, squeezed by rent increases, are also seizing this window of opportunity.

Add to that the influx of priced-out buyers from premium suburbs like Fitzroy and Carlton now looking to buy in areas like Flemington and Kensington, and you have a recipe for price acceleration.

Beyond the Capitals: Regional Queensland Holds Strong

While Melbourne’s rebound makes headlines, regional Queensland remains a powerhouse. Townsville continues to post eye-watering year-on-year gains—22% for houses and 23.6% for units—making it the strongest-performing market in Australia over the past 12 months.

This growth is backed by strong investor interest, infrastructure spending, and tight housing supply. “Townsville has been an investor hotspot... that’s driven a lot of funds into the area,” says Flaherty. Even though growth has slowed compared to last year, its momentum remains unmatched.

Other regional Queensland areas like Mackay, Rockhampton, and the Barossa region are also soaring, recording annual house price increases above 14%. The Sunshine State’s dominance continues, with six of the top 10 fastest-growing regions nationwide found in Queensland.

Darwin's Long-Awaited Comeback

Darwin, a market long viewed as sluggish and high-risk, is now showing signs of robust recovery. With house prices up 3.3% and units 2.2% over the last quarter, the city is climbing back into investor favour. The draw? Strong rental yields and serious housing undersupply.

“There was a 44% shortfall in new homes built in FY24, and a 49% shortfall in FY23,” Flaherty explains. With fewer properties available and steady population growth, investors are flocking to Darwin to capitalise on high returns and future capital appreciation.

Buyers Shift Gears: Sentiment Drives Movement

A notable shift in buyer sentiment is accelerating this growth. REA Group’s Pulse survey revealed that 40% of Victorian buyers now believe it’s a good time to buy—a higher proportion than any other state. Meanwhile, Westpac’s House Price Expectations Index saw a dramatic 14% jump in Victoria alone.

What this tells us is simple: the psychology of property is back in play. Buyers who waited on the sidelines are now re-entering the market, spurred by lower borrowing costs and the fear of missing out on future gains. With more rate cuts potentially on the horizon, the race to buy before prices rise further is well and truly underway.

What It All Means for Investors and Homebuyers

This rapid shift in market momentum offers a clear takeaway: timing matters. Whether you're a seasoned investor or a first-home buyer, the window of opportunity is open—but it may not last. Areas that were previously cold are now hotbeds of activity, and those that led the growth charge in the past year may soon be overtaken by new contenders.

Inner Melbourne, Darwin, Townsville, and even lesser-known regions like the Barossa and Mackay are suddenly the smartest bets in the country—not just because of current growth, but because they are still relatively affordable compared to Sydney or Perth.

Conclusion: Australia's Market Rebound Has Begun—Are You Ready?

What we’re witnessing is not just a rebound—it’s a rebalancing. Markets once viewed as overpriced are stabilising, while affordable regions with strong fundamentals are rising. Investors are chasing yields, first-home buyers are stepping in, and the RBA’s rate cuts are acting as fuel.

Whether you're looking to invest, upsize, or finally enter the market, now is the time to act with precision. Watch the growth corridors. Follow infrastructure pipelines. And most importantly—stay ahead of the sentiment shift before it's priced in.

About the Author

Kalpi Prasad is the founder of Renown Lending and a finance professional with more than 25 years of experience in the Australian property and lending sector. He writes about macroeconomic trends, real estate investment, and the psychology of market movement for Medium and other financial publications.