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House prices will keep climbing for the remainder of the year despite a pause in interest rates, market research firm Cotality has said.
The November cash rate decision from the Reserve Bank of Australia (RBA) could take “some heat out of the property market” through to the end of the year, but is unlikely to keep housing prices from increasing, Cotality added.
On Tuesday (4 November), the RBA voted unanimously to hold the cash rate steady at 3.60 per cent.
The market, including Cotality, is widely predicting another rate hold when the RBA next meets on 8–9 December.
Cotality suggested the latest hold should be “keeping a temporary lid on borrowing capacity and dampening consumer sentiment”.
However, it noted that while a pause in interest rates could help slow price growth, other factors are likely to keep housing values rising leading into 2026.
“For first home buyers, the expansion of the 5 per cent deposit scheme has increased credit availability for eligible borrowers on the scheme, which may have already added to demand across the low-to-median value segments of the market in October,” it said.
The imbalance between housing supply and demand has kept values on the rise even during previous periods of rate increases, Cotality said.
The supply-demand mismatch has continued this year, with estimated sales in the three months to October (140,000) outpacing the 125,000 new listings observed by Cotality in the same period.
While building approvals jumped 12 per cent in September, the government risks falling further behind its National Housing Accord target of building 1.2 million homes by 2029.
Australia needs to build around 240,000 new dwellings a year, but total dwelling commencements are on track to reach around 200,000 in 2026.
The supply shortfall has helped house prices climb to record highs.
Property values across Australia surged in October, marking the 10th consecutive month of growth, according to PropTrack research.
Cotality estimates that an affordable home price for the median income household has increased by almost $65,000 from the end of 2024 to the end of September.
Despite record house prices, Cotality said conditions for mortgage holders had improved this year.
“Existing borrowers may be disappointed with the pause; however, mortgaged households are generally in a better position than at the end of 2024… This means fewer owners may feel pressured to sell if buyers are put off by a pause in the cash rate and selling conditions weaken,” it said.
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