Australian home values experienced a notable acceleration in October, increasing by 1.1 percent—the highest monthly growth recorded since June 2023. This upward momentum, building steadily since the initial rate reduction in February, has elevated the annual growth rate to 6.1 percent nationwide.

“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,” said Tim Lawless, Cotality’s research director.

Monthly gains were broadly distributed, with all capital cities and regional areas registering an increase in values, ranging from a 1.9% uplift in Perth to a 0.3% rise in Hobart.

Across the combined capital cities, October’s 1.1% increase translated to a median dwelling value rise of just over $10,000 for the month. Since February, values in the capitals have climbed 5.9%, equating to approximately $53,700 in additional median value.

Several factors are underpinning the robust housing market, but the principal driver behind the recent acceleration is the persistent imbalance between limited supply and heightened demand. Nationally, Cotality’s rolling quarterly estimate indicates home sales are trending 3.1% above the previous five-year average, while the volume of advertised properties over the four weeks ending 26 October remained 18% below the long-term average.

Persistently low advertised supply, coupled with sustained above-average demand, has continued to favour sellers throughout spring. While auction clearance rates have softened marginally, they remain elevated—consistently sitting in the high 60 to low 70 per cent range since the season began, well above the decade average.

This acceleration in growth rates also aligns with the introduction of the expanded 5% deposit guarantee scheme, which commenced on 1 October and has likely contributed to increased housing demand, particularly within the lower and middle segments of the market.

Notably, the strongest growth continues to be seen within the middle and lower quartiles of the market. Across the combined capitals, dwelling values increased by 1.4% in the middle market and 1.2% in the lower quartile, while values in the upper quartile recorded a more modest 0.7% rise over the month.

“The upper quartile of the market is showing the lowest rate of growth across almost every capital city. Stronger housing demand at the lower price points is likely a culmination of serviceability constraint seroding 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," said Lawless.