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Housing values have grown at their fastest pace since June 2023, pushing annual growth to 6.1 per cent, according to Cotality research.
Cotality’s Home Value Index found that dwelling values rose 1.1 per cent in October, extending the upturn that has been gathering momentum since the first interest rate cut in February.
The step-up in growth rates coincides with the expanded 5 per cent deposit guarantee scheme going live on 1 October, which has likely added to housing demand, especially around the lower to middle price points of the market, Cotality said.
It is the lower quartile and middle of the pricing spectrum where values are rising the fastest across most capitals.
Swift jumps in capital city median home values have already offset the boost to borrowing capacity for median income households from earlier rate cuts, the research shows.
“Before the February rate cut, housing conditions were losing momentum, even recording flat to falling values through late 2024 and January 2025,” Cotality’s research director, Tim Lawless, said.
“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 price increases have been broad-based, with every capital city and region recording a monthly rise in value, ranging from a 1.9 per cent lift in Perth to a 0.3 per cent rise across Hobart.
Across the combined capitals, the 1.1 per cent gain 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 are up 5.9 per cent or about $53,700.
Regional markets also posted a solid increase in the monthly rate of growth, with the 1.0 per cent increase the highest monthly gain across the combined regional markets since March 2022.
Cotality noted that the most significant factor contributing to stronger housing conditions was supply falling “well short” of demand.
Advertised supply levels over the four weeks to 26 October were 18 per cent below average, according to the market research firm.
“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 constraints eroding 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.”
[Related: Rising demand pushes units price growth ahead of houses]
