No end in sight to rapid national property price gains
National property prices surged again in October as record-low listings and strong population growth fuelled the fastest monthly gains in more than two years.
Property prices are surging and affordability is deteriorating.
New housing supply is showing no signs of being lifted to any relevant degree.
Populations around the country continue to swell.
National property prices are showing no signs of slowing down, with the Cotality Home Value Index for October revealing that home values lifted by 1.1 per cent over the course of the month.
Ominously for those sitting on the real estate sidelines, it was the fastest monthly gain since June 2023.
In usurping the capital growth rates of the previous 28 months, another $10,000 was added to the price of the average dwelling. Since February, when interest rates were cut after a long period of stasis, capital city dwelling values are up 5.9 per cent, or $53,700.
The cities that continue to run red hot are Perth and Brisbane but the gains have been broad-based.
Melbourne and Hobart are the only capitals not at their market peak, while every regional market outside Victoria and Northern Territory is also at its record high.
Over the past five years, regional property prices have soared by 59.3 per cent and by 43.9 per cent in the capitals, both of which are at their highest ever prices.
The dire state of property affordability in Australia – one of the most expensive property markets on the planet – is only exacerbated by renters having nowhere to turn.
Vacancy rates held around record lows of 1.4 per cent in October and rental growth is once again pushing higher.
On a seasonally adjusted basis, Cotality’s national rental index has risen by half a per cent per month over the past three months, the highest monthly growth in rents since May 2024.
Signs of a downward turnaround in the property market remain scarce.
The imbalance between demand and supply is likely to persist for a while yet.
Tim Lawless, Research Director, Cotality, said the number of home sales is a proxy for housing demand, and the trend to date has been resilient in the face of downside pressures. At the same time, immediate supply (based on listing numbers) is tracking around record lows for this time of the year.
“There are a lot of moving parts influencing the housing market at the moment; on one hand, we have persistently low levels of advertised supply and above-average levels of housing demand supporting value growth.
“On the other hand, we suddenly have a renewed inflation challenge and the prospect of a shallower rate-cutting cycle.
“Banking sector economists are no longer forecasting another rate cut in 2025, with CBA going further, forecasting no more cuts in this cycle.
“Adding to this, is severe affordability challenges and stubbornly low consumer sentiment, which could further dip on the back of cost-of-living pressures and easing labour market conditions.”
Compounding the supply shortage issue are home construction costs, which over the September quarter rose another 0.6 per cent, taking the cost to build 31 per cent higher over the past five years.
Brisbane highlights listing conundrum
Total property listings are down on an annual basis in Melbourne (by 4.8 per cent), Brisbane (11.6 per cent), Hobart (5.5 per cent) and Darwin (a massive 36.9 per cent), while they are flat in Sydney.
Nationally listings are down 4.2 per cent at a time when new supply and listings are more needed than ever.
The country’s population continues to grow, driven largely by overseas immigration.
Australia’s population is forecast to grow in 2026 to around 27.97 million to 28.8 million, fuelled by an annual growth rate (as of September 2025) of around 1.7 per cent to 1.9 per cent.
Leanne Spring, founder of Tailored Buyers Agents, said seller paralysis is behind a critical shortage in property listings.
Citing the example of Brisbane, Ms Spring said the Fear of Being Out (FOBO) was freezing listings, particularly in the $1 million to $2 million price sector.
“We have seen listings in this crucial price band disproportionately drop in the past year because, ironically, owners are too scared.”
She said the listing drought was due to an unprecedented market paradox.
“Extraordinary value gains across Brisbane, especially in the past quarter, have owners worried about selling their homes, only to be left out of a runaway market that they cannot afford to buy back into.
“So, if you choose to sell your $2 million property today, you’d need to find an extra $70,000 in just three months to buy the same calibre of home.
“Factor in that sell-out, buy-in transaction costs such as stamp duty, agent fees and legal expenses can be $100,000-plus, and it’s only compounding the hesitancy.
“As a result, owners are simply electing to stay put rather than sell.
“Some sellers are genuinely scared of being left homeless if they sell.
“This isn't a demand problem – it's a supply crisis driven by seller psychology.”
Ms Spring said she’s seen this listings drought most pronounced in Brisbane’s inner-ring suburbs, such as Camp Hill, Cannon Hill, Morningside, Tarragindi, Kedron, Stafford, Gordon Park, Enoggera, and Alderley.
“It’s those addresses five-to-10 kilometres from the CBD that are suffering most.
“This is our city’s critical second and third homebuyer price band – the next step for aspirational family buyers needing a little extra space.”
