TRANSCRIPT
There's perhaps no set of numbers as closely watched as those relating to housing. And new housing data from property analytics firm Cotality has provided more evidence of the state of Australia's housing market.
Their new data from November shows home values across the country have grown by one percent in November, with the price of a median dwelling now just over $888,000 and Brisbane becoming the second Australian city to reach the one million dollar median home price mark. Cotality Head of Research Eliza Owen says the low value segment - essentially the lower priced properties that would ordinarily be the target for first home buyers - is driving these numbers.
“Property values that are in the bottom 25 per cent of Australia's dwelling market have increased almost 9 per cent through the year to date, compared 6 per cent increase at the high end of the market. We also see areas like Brisbane, Perth and Adelaide continuing to lead gains. Perth was up a whopping 2.4 per cent over the past month, and we also saw a really strong increase in Darwin over the year, up 17 per cent and it's the same story.”
These numbers from Cotality also suggest an increasing rate of investor participation and falling numbers of first home buyers, something other reports and studies have also found. Greens senator Barbara Pocock says that means in practice, more and more Australians are being pushed out of the market and losing the chance to own their own home.
“We are seeing rise after rise which is putting housing out of reach of young people, out of reach of women trying to escape domestic violence. Labor is pouring fuel on the fire by making things worse. Their 5 per cent deposit scheme is increasing prices for housing and crowding out those first home buyers who come into the market and need to see a price that they can afford.”
But it's not just government policy that plays a role. Interest rates have also loomed large.
Cotality says interest rate reductions in 2025 helped to take home values seven and a half percent higher over the past 12 months - and these latest numbers from November actually represent a slow down in monthly growth as some buyers hit their limits.
“The property market is expensive. I think it was somewhat revitalized by interest rate reductions in 2025 that's taken home values seven and a half percent higher over the past 12 months. But now that we're back at this stage where interest rates may be on hold for some time. The cracks are starting to show a little bit.”
Eliza Owen says for those who do buy, surging house prices have undone the benefits of three interest rate cuts, with Cotality estimating the cuts increased the borrowing capacity of a median income household by $55,000, while home values have since risen by $60,000.
Affordability metrics to the September quarter also show a record high in the national dwelling value to household income ratio. That says the median dwelling value is 8.2 times higher than the annual pre-tax household income, and the levels of income required to service a mortgage at the median value are at 45 percent, a record level.
Eliza Owens says that might help explain why purchasers have increasingly flocked to the lower end of the price spectrum.
“It's a relatively cheap market with room to grow, but again, I think that's a signal that you have real affordability constraints in this market when even medium and high income buyers are being skewed to the lower value segment of the dwelling market.”
If you're a renter, the outlook on affordability is even worse.
Rents are rising across every capital city, with the national rental index five per cent higher over the past 12 months - the highest annual rate of growth in a year. Barbara Pocock says too many Australians are struggling to keep up - and she blames Australia's tax system for contributing to the problem.
“They're facing the lowest, historically low vacancy rates and rising rent there are solutions out there for our housing crisis. We know we can make a difference. We can end the tax breaks. We can build the public housing. We can end unlimited rent increases making a difference for 1000s and 1000s of Australian families, putting a roof over our heads. Housing is a human right, and we need a response from a Labor Government to make a difference.”
But it's not just the tax system that's come under scrutiny.
Australia faces an ongoing supply shortfall, and developers say there are issues getting in the way of government policy to boost stocks of social and affordable housing and build-to-rent properties.
Eliza Owen says there are already 10 percent fewer listings than a year ago - and they're 6 percent below the five year average. But she says a softening of demand as migration levels ease and renters form larger households to escape price increases is not expected to put the brakes on rising prices altogether.
“I think that we've got cost of living pressures, affordability pressures, and against a backdrop of rates expected to be steady for some time, and definitely a signal that APRA can intervene if they see lending becoming potentially risky, this is likely to limit credit growth and housing demand. The flip side, though, is that it is happening against limited supply, both sellers are empowered to hold their property back if selling conditions aren't good, and developers don't establish new housing stock if the price signals aren't there either. So that's one thing that offsets that lack of demand, and is why we would expect at least some continuation of price increases into 2026.”
