October sees broad-based gains as supply remains tight and demand outpaces expectations
Australian home values rose by 1.1% in October, marking the sharpest monthly increase since June 2023, according to property data and analytics provider Cotality.
The annual growth rate has now reached 6.1% nationwide, following a steady acceleration in housing values since the interest rate reduction in February.
“Before the February rate cut, housing conditions were losing momentum, even recording flat to falling values through late 2024 and January 2025,” said Tim Lawless, research director at Cotality. “The first rate cut in February marked a clear turning point, with home values moving through a positive inflection across most regions and gathering steam since then.”
All capital cities and regional areas experienced an increase in home values during October. Perth led the capitals with a 1.9% rise, while Hobart recorded a 0.3% lift. Across the combined capitals, the 1.1% monthly increase translates to a gain of just over $10,000 in median dwelling value. Since February, capital city dwelling values have climbed by 5.9%, or about $53,700.
The growth in home values is largely attributed to demand outstripping supply. Cotality’s rolling quarterly estimate indicates home sales are 3.1% above the five-year average, while the number of properties listed for sale in the four weeks to Oct. 26 was 18% below average.
This imbalance has favoured sellers throughout spring, with auction clearance rates remaining above the decade average, fluctuating between the high 60% and low 70% range since the season began.
The introduction of the expanded 5% deposit guarantee scheme on Oct. 1 appears to have further stimulated demand, particularly among buyers in the lower and middle segments of the market. In October, dwelling values across the combined capitals increased by 1.4% in the middle market and 1.2% in the lower quartile, while the upper quartile saw a 0.7% rise.
“The upper quartile of the market is showing the lowest rate of growth across almost every capital city,” Lawless (pictured right) said. “Stronger housing demand at the lower price points is likely a culmination of serviceability constraints eroding purchasing power, persistently higher than average levels of investor activity, and what is likely a pickup in first home buyers taking advantage of the expanded deposit guarantee.”
Regional markets also recorded notable gains. The combined regional markets posted a 1% monthly increase, the largest since March 2022. Regional Western Australia led with a 1.8% rise, followed by regional Queensland at 1.1% and regional New South Wales at 1%.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
