Australian housing markets continued to strengthen in September, with the Cotality Home Value Index rising 0.8%—the largest monthly increase since October 2023—driven by a 0.9% gain across the capital cities.

Over the September quarter, the national HVI rose by 2.2%, advancing from a 1.5% increase in the June quarter and more than doubling the 1.1% uplift recorded in the March quarter. This quarterly growth translated to an $18,215 gain in the median dwelling value.

Momentum in the market has broadened, with every capital city and regional area registering growth in dwelling values over the month, the quarter, and the past year. Nonetheless, variance in the rate of expansion is becoming apparent once more.

 “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. At the same time, estimates for quarterly home sales are tracking above average, demonstrating a clear disconnect between demand and supply," Cotality’s research director, Tim Lawless, said.

House values generally outpaced unit values across capital cities during the September quarter, with increases of 2.4% for houses and 1.7% for units. However, Brisbane was a notable exception, as unit values outperformed houses for the seventh consecutive quarter due to sustained undersupply. Perth and Hobart also saw unit values rise more than house values this quarter, though this was not as prolonged as in Brisbane.

Value growth was seen across all market segments. Price growth has now shifted from the lower to the middle market, likely driven by improved borrowing capacity as interest rates fell. Over the same period, lower quartile dwelling values in the combined capitals rose by 2.6%, the middle market by 2.7%, and the upper quartile by 1.8%.

Advertised housing supply remains well below average in all capital cities, supporting continued upward pressure on home values. Over the four weeks to 28 September, capital city listings were around 18% below the previous five-year average, while estimated sales volumes for the September quarter were 7.3% above the same benchmark—underscoring a pronounced imbalance between limited supply and elevated transaction activity.

This persistent mismatch between limited supply and robust demand has contributed to increasingly favourable selling conditions. Auction clearance rates have consistently hovered around 70% since mid-August, rising from an average of approximately 63% during the June quarter and 62% across the preceding March quarter.