Property prices across Australia rose last month on the back of the Reserve Bank’s two interest rate cuts, and are set to keep increasing throughout the year.

Cotality’s Home Value Index showed prices were up 0.5 per cent nationwide in May to lift the median cost up to $831,288.

Darwin experienced the biggest jump, up 1.6 per cent, while properties in Perth rose 0.7 per cent for the month and 13.3 per cent for the last year, followed by Brisbane and Hobart (both 0.6 per cent), and Sydney (0.5 per cent).

Cotality said the driving force behind the price increases was interest rates, both the two already handed down by the RBA in February and May, and the market consensus that there are more still to come before the year is done.

“The continued momentum we’re seeing across almost all markets is no doubt being fuelled by rate cuts – both those that have already happened, but also potential cuts in the coming months,” research director Tim Lawless said.

“With interest rates falling again in May, we are likely to see a further positive influence flowing through to housing values in June and through the rest of the year.”

Despite the monthly rise, a downturn in prices in late 2024 means national prices were up 3.3 per cent for the last 12 months – the most modest increase since August 2023 – while home values in Melbourne (-1.2 per cent) and Canberra (-0.7 per cent) have dipped in the last year.

Meanwhile, almost 3000 auctions were held over the weekend, making it the second-busiest of the year and the busiest since Easter as sellers looked to cash in on the greater borrowing power the RBA’s latest rate cut provided buyers.