Quarterly Property update

The growth of Australian home values is not slowing down with national gains continuing. Cotality’s national Home Value Index rose 3.1 per cent over the quarter to December, growing 1.0 per cent in November, marking the third month in a row where Australian home values have increased by one per cent or more. However, the pace of growth is moderating, coming down from 1.1 per cent in October.

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.”

Markets are starting to diverge

The larger capital cities had gains, with Sydney property values rising 0.5 per cent and Melbourne, the second largest capital city, increasing by 0.3 per cent in November. All of the other capital cities had gains of 1 per cent or higher throughout the month, with Perth leading the way with a 2.4 per cent surge in value.

Cotality’s research director, Tim Lawless stated that the growth across the mid-sized capitals is diverging from the larger capital cities, which is similar to what we saw back in 2023 and 2024.

“The skew towards the mid-sized capitals is especially evident in Perth, where listings are holding more than 40 per cent below average, buyer demand is elevated and the 2.4 per cent monthly rise in dwelling values has added just over $21,000 to the median in November, roughly $5,000/week.”

Supply remains tight

Auction clearance rates peaked in mid-September and have been trending lower in the following months, falling below the decade average by mid-November with the larger capital cities, Sydney and Melbourne seeing clearance rates sitting around 60 per cent in the second half of November.

Housing supply is continuing to remain scarce for a number of reasons, with affordability being the main factor, followed by skilled labour shortage, which is holding back the construction of homes.

Inflation causing concern

There is renewed pressure on the Reserve Bank of Australia, with inflation increasing again in October to 3.8 per cent, up from 3.6 per cent in September. This rise indicates the RBA will not make a rate cut and there has been speculation that the cash rate will be held for an extended period of time, or the RBA may even consider a rate hike in December or February 2026, which would be a concern for first home buyers and mortgagees alike.

Changes to lending criteria may impact the market

In a recent announcement from Australian Prudential Regulation Authority (APRA), there will be changes to limit the high debt-to-income (DTI) ratio of loans. Mr. Lawless noted the majority of recent mortgage originations remain significantly below a DTI of six or more. “This new credit policy won’t be implemented until February next year, but even then, it’s likely to only affect the margins of borrowing activity,” Mr Lawless said.

Dwelling values over the quarter

Melbourne

The Victorian capital saw a modest 1.6 per cent quarterly move according to Cotality figures, taking the city’s median dwelling price to $823,495. Investors should take note that the gross rental yield figure for Melbourne is 3.6 per cent.

Sydney

Sydney experienced a dwelling value change of 1.8 per cent resulting in a median of $1.269 million. The gross rental yield for the Harbour City remains the lowest of the capitals at 3.0 per cent.

Brisbane

The Queensland capital continues to record the second most expensive spot for dwelling values at $1.015 million and a quarterly rise of 5.5 per cent. Brisbane has recorded a gross rental yield of 3.4 per cent.

Canberra

The national capital recorded a rise of 2.2 per cent during the quarter with the median now sitting at $891,626. For Canberra, the gross rental yield is 4.0 per cent.

 Perth

Perth prices increased 7.4 per cent over the quarter, taking its medium to $914,229. Perth recorded 3.9 per cent gross rental yield.

For more information about how you might be able to purchase a property in the current market, get in touch with us today. 

Note: all figures in the city snapshots are sourced from: Cotality national Home Value Index (December 2025)