Housing values growth in Australia has surged to its fastest pace in over two years.
National dwelling values have surged 1.1% in October, marking the fastest monthly gain since June 2023 and pushing the annual growth rate to 6.1%.
This comes as momentum has been growing since the first interest rate cut in February.
Cotaility research director, Tim Lawless, said prior to the February rate cut, conditions were losing momentum and even recording flat-to-falling levels through late 2024 to 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,” he said.
Monthly gains have been recorded across all capital cities, with the highest gain in Perth (1.9%) and the lowest in Hobart (0.3%).
The 1.1% October gain equates to an increase of over A$10,000 in the median dwelling value across the combined capital cities.
Since February, capital city dwelling values have grown by 5.9% of around AA$53,700.
One of the key contributing factors is housing supply falling well short of demand.
At a national level, Cotality’s rolling quarterly estimate of home sales is tracking 3.1% above the previous five-year average.
The rising growth rates also coincide with the expanded 5% deposit guarantee scheme starting on 1 October, which has likely added to housing demand, especially in lower to middle price points, according to Cotality.
This is reflected in the broad middle and lower quartiles experiencing the greatest growth.
“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 constraint reducing 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 solid increases in monthly growth, rising by 1%. This is the highest monthly gain across the combined regional markets since March 2022.
