- Home value trends (Source: Cotality)
The RBA Board kept the cash rate at 3.6% in November, breaking the trend of quarterly cuts due to rising core inflation. National home values accelerated in 2025, with the median dwelling value increasing by around $43,000, driven by lower debt costs and increased purchasing power. Housing market dynamics remain strong, with demand outpacing supply and the 5% deposit scheme expanding credit availability for first home buyers. Existing borrowers are in a better financial position, with average variable rates falling and housing arrears decreasing compared to 2024.
- Property investors (Source: Aska Soo)
Property investors now account for 38% of new lending in Australia, the highest share on record, up from 24% in 2021. Investors are returning to the market due to stabilizing economic conditions and expectations of continued property value growth driven by housing undersupply and population growth. The average investor loan ($667,512) is now almost identical to the average owner-occupier loan ($661,534), reflecting increased market competitiveness. The surge in investor activity creates challenges for first-home buyers, as investors often have more resources and can push property prices higher. Despite increased investor activity, rental supply remains tight, and rents continue to rise across Australian capital cities.
- 5% deposit scheme (Source: Will Paige)
The government’s expanded 5% deposit scheme saw a 48% increase in first home buyer guarantees in October 2025, with 5,778 guarantees issued. The scheme removes income limits and placement caps, enabling first home buyers with small deposits to access mortgages without Lenders Mortgage Insurance. Treasury estimates 70,000 homes will be bought in the first year, though some critics argue the scheme might contribute to rising house prices. Housing Minister Clare O’Neil emphasized the scheme’s goal of helping more people own homes and pay off their own mortgages.
- Financial markets (Source: RBA)
Australia’s economy is growing modestly, driven primarily by strong population growth and record net overseas migration. Despite avoiding a technical recession, Australia is experiencing a “per capita recession” with weak household consumption and discretionary spending. Global economic growth remains subdued, with inflation trending downward and interest rates peaking in many economies. The Australian residential property market is valued at $11.8 trillion, with only $2.4 trillion in debt and 50% of homeowners having no mortgage. Australia currently faces a significant housing shortage, with an estimated deficit of over 200,000 properties and rising construction costs. The labor market remains resilient, with unemployment at 4.3% and the participation rate at 66.9% as of September 2025. Consumer confidence remains low due to ongoing economic uncertainties, inflation, and interest rate concerns. Household net wealth remains strong, with asset growth outpacing increased debt levels. The Reserve Bank of Australia (RBA) has kept interest rates on hold, with financial markets forecasting no changes until mid-2026. Service-related industries, particularly healthcare and hospitality, have shown significant job growth in recent years.
- Housing chart (Source: Cotality)
The house price premium in Australia’s combined capitals has surged to a record $363,000, nearly 50% above median unit values, driven by persistent demand for detached homes and long-term land value advantages. Affordability constraints are shaping growth, with lower-to-middle value segments outperforming despite recent rate cuts. The national property market has hit an unprecedented $12 trillion milestone, doubling in size over the past decade. Regional markets like South Australia, Western Australia, and Queensland are gaining a larger share of housing value, signalling a geographic shift in market dynamics.
- Rental market (Source: Dr Andrew Wilson)
Rental vacancy rates fell in most capital cities in October, with rates below 2% indicating a competitive rental market likely to drive rent increases. House rents were mostly steady in October, with Darwin seeing a 2.0% increase, while Hobart and Adelaide experienced minor declines. Annual house rent growth was led by Hobart at 8.4%, with Brisbane, Perth, and Adelaide also showing increases, while Sydney remained flat and Melbourne declined. Unit rents showed mixed monthly performance, with Canberra and Adelaide rising, while Brisbane, Perth, and Melbourne declined, but annual unit rent growth remained solid across all capitals.
- Brisbane’s property market (Source: Melinda Jennison)
Brisbane’s property market is booming with significant price growth, rising 1.8% in October and 10.8% annually. Low stock levels across sale and rental markets continue to drive demand, particularly in sub-$1 million segments. Units are outperforming houses, with median unit values rising 14% annually due to affordability and supply constraints. Investor activity and first-home buyer participation remain strong, supported by the expanded Home Guarantee Scheme. Rental markets are extremely tight, with house and unit rent growth accelerating to 5.6% and 6.5% respectively. Potential headwinds include housing unaffordability, uncertain interest rates, and potential regulatory scrutiny of credit growth. The near-term outlook remains firm, with continued value appreciation expected, primarily driven by attached dwellings and well-located houses.
- Regional property markets (Source: Craig Francis)
Regional property markets have consistently outperformed capital city markets in both capital growth and rental yields over the past five years. The highest rental yields are concentrated in regional Western Australia and Queensland, with some areas achieving over 9% gross rental yields. The regional property market’s growth is slowing, with capital cities catching up in monthly price growth and rental yields decreasing. Two key drivers of regional property market success are affordability-driven lifestyle migration and commodity market cycles. Sydney property investors are increasingly turning to regional markets for better investment yields and more affordable properties. Regional areas face infrastructure challenges, including the need for greater economic diversity and housing supply. Population growth in regional Australia continues, driven by high capital city property prices and the appeal of regional lifestyles. Experts emphasize the importance of targeted regional housing plans and investment in infrastructure to support growing regional populations.
- Investor lending (Source: Will Paige)
Investor lending reached record highs, with total loan value increasing 18.7% year-on-year to $39.8 billion in the September quarter. Investment loans grew across all states and territories, now comprising around 40% of total new loans. First home buyer lending also increased, but at a smaller margin compared to investor loans, with a 2.3% growth in the number of loans. Falling borrowing costs and low vacancy rates were cited as favorable conditions for property investors. Property investment has grown significantly, with investors making up their highest share of new lending since 2017.
- Australian housing market update (Source: Tim Lawless)
National home values rose 1.1% in October, the fastest monthly gain since June 2023, with annual growth reaching 6.1%. Growth is driven by a severe supply shortage, with home sales 3.1% above average and advertised supply 18% below average. Middle and lower price quartiles experienced the strongest growth, likely boosted by the expanded 5% deposit guarantee scheme. Perth led national growth with a 1.9% rise, experiencing the most significant supply scarcity with stock levels 45% below the 5-year average. Rate cuts are unlikely in 2025 due to the Q3 inflation shock, potentially constraining future borrowing capacity. Regional markets also saw growth, with regional Western Australia and Queensland performing strongly, and rental growth accelerating.
- CoreLogic Auction Results (Week ending 9 November 2025)
(Total Auction / Clearance Rate)
– Sydney: 1,186 / 64.5%
– Melbourne: 1,388 / 65.9%
– Brisbane: 209 / 69.9%
– Perth: 16 / 75%
– Canberra: 136 / 61.8%
– Adelaide: 130 / 75.4%
– Tasmania: 3 / 33.3%
– Combined Capitals: 3,068/ 65.9%
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