Kalbarri, a West Australian town hit by Tropical Cyclone Seroja in April 2021, was up 40.2 per cent for houses, leading lower-value suburbs that delivered the strongest value gains, property data provider Cotality reports.
Australia's housing market defied affordability and cost-of-living pressures to deliver a growth rate of 7.7 per cent, Cotality's annual Best of the Best report states.
Kalbarri, about 600km north of Perth, showed the strongest value gain for houses, while Cranbrook in Queensland was up 29.3 per cent for units.
The WA town was among communities hit by Cyclone Seroja that damaged more than 875 buildings and destroyed 32, including 23 homes, in April 2021.
Sydney's premium suburbs remain the nation's highest-value markets, with Point Piper recording a house median of $17.3 million and unit median of more than $3.1 million.
Mosman in Sydney recorded the highest total value of house sales nationally, with $1.58 billion transacted across 229 sales.
WA's resource-linked towns produced the strongest rental yields, with Newman at 12.6 per cent for houses and South Hedland at 17.8 per cent for units.
Pegs Creek in WA had the highest annual house rent increase at 23.5 per cent, while unit rents rose highest in Rockhampton, Queensland, up 21.1 per cent.
Cotality Australia head of research Eliza Owen said national dwelling values were set to close 2025 at least 8 per cent higher.
"Markets entered 2025 under considerable pressure," she said in a statement on Thursday.
"What followed was an unexpectedly strong rebound as interest rate cuts, easing inflation and limited supply reignited competition."
Three rate cuts, an expansion of the five per cent Home Guarantee Deposit Scheme and low listing volumes helped drive the recovery, she said.
Sydney's top-end suburbs sat in their own price bracket in 2025, widening the gap between premium enclaves and the rest of the nation.
Point Piper led, followed by areas such as Bellevue Hill, Vaucluse, Tamarama and Rose Bay.
"These suburbs are far less sensitive to borrowing costs and listing trends, which is why their performance often diverges from the broader market," Ms Owen said.
The fastest-growing capital city suburb for houses was Mandogalup in Perth, up 33.0 per cent to $944,609, alongside outer Darwin suburbs where moderate entry points below $600,000 supported stronger value growth.
The most affordable capital city suburbs for houses were clustered around Greater Hobart, including Gagebrook, Herdsmans Cove and Bridgewater, all with medians under $450,000.
Suburbs in Adelaide and Darwin provided some of the best value for unit buyers, with medians ranging from less than $250,000 in Adelaide's Hackham to $328,416 for Karama in Darwin.
House values fell 11.6 per cent in Millthorpe, NSW, and 10.5 per cent in Tennant Creek in the Northern Territory.
Several unit markets recorded annual declines, including South Hedland in WA, down 14.1 per cent, and Mulwala in NSW, down 11.8 per cent.
Newman, in WA's Pilbara region, delivered the strongest rental house yields at 12.6 per cent, reflecting demand linked to iron ore operations, while Kambalda East, near the Goldfields mining belt, followed at 12.2 per cent.
Ms Owen said market conditions were expected to be more restrained in 2026 as borrowing capacity, affordability and credit assessments placed limitations on demand.
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