Low supply and strong demand drive national price gains
Australian housing prices continued their upward trajectory in September, with the Cotality Home Value Index (HVI) recording its sharpest monthly increase since October 2023. National dwelling values rose by 0.8% for the month, led by a 0.9% lift across the capital cities.
Over the September quarter, the national HVI climbed 2.2%, up from a 1.5% rise in the June quarter and double the 1.1% increase registered in the March quarter. This quarterly growth equates to an $18,215 rise in the median dwelling value.
All capital cities and regional areas posted gains in dwelling values over the month, quarter, and year. However, the rate of growth is not uniform. Perth and Brisbane outperformed the larger capitals, with quarterly increases of 4% and 3.5% respectively, driven primarily by the unit market. Darwin saw the strongest growth, with values up 5.9% over the past three months.
“The number of homes for sale at the end of September was about 53% lower than average in Darwin, 45% below average in Perth and down 31% in Brisbane,” said Tim Lawless, research director at Cotality. “At the same time, estimates for quarterly home sales are tracking above average, demonstrating a clear disconnect between demand and supply.”
Most capital cities recorded faster growth in house values than in units, with house values rising 2.4% and units 1.7% over the quarter. Brisbane was an exception, where unit values have outpaced houses for seven consecutive quarters due to limited supply. Perth and Hobart also saw unit values rise more quickly than houses in the September quarter, though this pattern has been less consistent.
Growth has been observed across all value segments, but the strongest gains have shifted from the lower end of the market to the middle. This trend likely reflects increased borrowing capacity as interest rates fall, supporting demand for properties at higher price points.
In the combined capitals, lower quartile dwelling values rose 2.6% in the September quarter, compared with a 2.7% increase in the middle segment and a 1.8% rise at the upper end.
Advertised property stock remains below average in every capital city, contributing to continued price growth. Over the four weeks to Sept. 28, capital city listings were around 18% below the five-year average. Sales activity in the September quarter was estimated to be 7.3% above the five-year average.
The imbalance between supply and demand has strengthened selling conditions. Auction clearance rates have hovered near 70% since mid-August, up from about 63% in the June quarter and 62% in the March quarter.
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