Overview
- Australia's home value growth hits the fastest pace in over two years as national dwelling values surged 1.1% in October, marking the strongest monthly gain since June 2023 and pushing the annual growth rate to 6.1%.
- Expanded deposit guarantee scheme intensifies competition for more affordable properties
- Swift value rises mean capital city median home values have already offset the boost to borrowing capacity for median income households from earlier rate cuts.
The pace of growth in Australian home values accelerated in October, rising by 1.1%, the fastest monthly gain since June 2023.
Momentum has been building in the rate of housing value growth since the first rate cut in February, pushing the annual pace of growth to 6.1% nationally.
Home Value Index
Index results as at 31st October 2025
“Before the February rate cut, housing conditions were losing momentum, even recording flat to falling values through late 2024 and January 2025,” said Tim Lawless, Cotality’s research director. “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.”
Monthly gains have beenbroad-based, with every capital city and rest of state region recording a monthly rise in value,ranging from a 1.9% surge in Perth to a 0.3% rise across Hobart.
Across the combined capitals, the 1.1% gain seen in October equates to an increase of just over $10,000 in the median dwelling value over the month. Since February, capital city dwelling values areup 5.9%, or approximately $53,700.
There are many factors contributing to stronger housing conditions, but ultimately the uptick in growth is reflective of supply falling well short of demand. At the national level, Cotality’s rolling quarterly estimate of home sales is tracking 3.1% above the previous five-year average, while advertised supply levels over the four weeks to October 26thwere 18% below average.
Such tight advertised supply levels against above-average levels of demonstrated demand have skewed selling conditions towards vendors through spring. Although auction clearance rates have eased a little, they have held above the decade average — in the high 60% tolow 70% range since the start of spring.
The step up in growth rates also coincides with the expanded 5% deposit guarantee scheme going live on October 1st,which has likely added to housing demand, especially around the lower to middle price points of the market.
Indeed, it is the broad middle and lower quartile of the market where gains are strongest. Across the combined capitals, dwelling values were up 1.4% across the middle market and rose 1.2% across the lower quartile, while upper quartile values were 0.7% higher through the month.
“The upper quartile of the market is showing the lowest rate of growth across almost every capital city,” said Cotality’s research director, Tim Lawless. “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 ofthe expanded deposit guarantee.”
Regional markets also posted a solid increase in the monthly rate of growth, with the 1.0% increase the highest monthly gain across the combined regional markets since March 2022. Regional WA recorded the strongest rise, with a 1.8% increase in values, followed by Regional Qld up 1.1% and Regional NSW with a 1.0% lift.
