FRD Homes
Property
Values
FRD Homes
Solid
Growth
FASTEST GROWTH IN TWO YEARS
After a period of stagnation through late 2024 and into January 2025, Australia’s housing market has re-entered a phase of robust growth, fuelled by renewed confidence and a structural supply imbalance.
According to Cotality Research Director Tim Lawless, “Before the February rate cut, housing conditions were losing momentum, even recording flat to falling values through late 2024 and January 2025. 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.”
That shift has been both broad-based and rapid. Every capital city and regional market recorded value gains in October, from a 1.9% surge in Perth to a 0.3% rise in Hobart. Across the combined capitals, dwelling values rose 1.1%, equating to an increase of just over $10,000 in the median home value for the month. Since February, capital city dwelling values have lifted 5.9%, or approximately $53,700.
Supply and Demand Remain Deeply Out of Sync
While interest rates provided the initial spark, the sustained acceleration in prices reflects a familiar dynamic: supply continues to fall well short of demand.
Cotality’s rolling quarterly estimate of home sales is tracking 3.1% above the five-year average, while the number of advertised listings over the four weeks to 26 October sat 18% below average. The result is an increasingly competitive market environment that continues to favour vendors.
If you are looking to expand your investment property portfolio, or looking to start one, data (like that in Cotality’s Home Index Report) can help you narrow down the doors to open up new home opportunities in this tight market.
Policy Levers Add Heat to the Lower End
Adding further momentum, the expanded 5% Deposit Guarantee Scheme, which commenced on 1 October, has boosted buyer activity, particularly across the lower and middle segments of the market.
Across the combined capitals, middle-tier dwelling values rose 1.4% in October, followed by 1.2% growth at the lower quartile. The upper quartile recorded a more modest 0.7% increase.
“The upper quartile of the market is showing the lowest rate of growth across almost every capital city,” Lawless 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 a pickup in first-home buyers taking advantage of the expanded deposit guarantee.”
Regional Markets Re-Emerge
Regional markets are also regaining momentum. The combined regional index rose 1.0% in October, marking the strongest monthly gain since March 2022. Regional Western Australia led with a 1.8% rise, followed by Regional Queensland (up 1.1%) and Regional New South Wales (up 1.0%).
The Outlook: Momentum, but Not Without Risk
The February rate cut may have reignited market momentum, but it has also amplified existing imbalances. With demand holding firm, advertised supply constrained, and targeted policy support fuelling entry-level activity, upward pressure on prices appears likely to persist in the near term.
However, affordability remains a critical pressure point. As growth consolidates at the lower and middle ends of the market, it looks like the tension between price gains and serviceability will continue to test buyers and policymakers.
