- Property prices in Australia are growing at their fastest rate since October 2023.
- The expanded Home Guarantee Scheme and cash rate cuts have seen a surge in buyer activity while supply remains subdued.
- RBA Governor Michele Bullock says it will "take time" for the Housing Accord to improve "structural supply issues".
Cotality's Home Value Index (HVI) shows the national median house price is now nearly $930,000.
Property prices in Sydney, Brisbane, Adelaide, Perth and Darwin all hit new all time highs last month, while prices in Melbourne and Canberra aren't far off their peaks.
After three cash rate cuts, buyer activity appears to be increasing, spurred on by the expansion of the First Home Guarantee (FHG), which officially began on Wednesday.
The Real Estate Buyers Agents Association of Australia (REBAA) has noted a "frenzy" of buyers are panicking about the expanded scheme and rushing to get into the market before prices go up further.
Meanwhile, Cotality research director Tim Lawless says there's still no sign of supply picking up.
"The number of homes for sale at the end of September was about 53% lower than average in Darwin, 45% below average in Perth, and down 31% in Brisbane," he said.
"At the same time, estimates for quarterly home sales are tracking above average, demonstrating a clear disconnect between demand and supply."
No more bargains?
The national median dwelling price has risen 4.8% since September 2024, but that figure might not tell the entire story.
Throughout Australia there are countless examples of suburbs, predominantly cheaper areas, that have seen far more significant increases - in Darwin's Palmerston, for example, the average property is 20.6% more expensive than it was this time last year.
The HVI suggests growth is predominantly being driven by the lower end of the market, and Mr Lawless thinks areas with prices below the FHG's new caps could be set for even more rapid growth.
"Amid already scarce supply, prospective first home buyers looking to utilise the deposit guarantee may be feeling anxious as competition among buyers picks up," Mr Lawless said.
"We could see the value of houses in well-located areas, recently unlocked by the expanded caps, surpass those new price caps quite rapidly."
Just under half (49.9%) of Australian suburbs currently have a median house price at or under these caps, while in 93.2% of suburbs first home buyers could purchase a median-priced unit under the FHG.
New Home Guarantee Scheme property price caps
| Location | Previous property price cap | Property price cap from 1 October 2025 |
|---|---|---|
| Sydney, Illawarra, Newcastle, Lake Macquarie | $900,000 | $1,500,000 |
| NSW – other | $750,000 | $800,000 |
| Melbourne, Geelong | $800,000 | $950,000 |
| VIC – other | $650,000 | $650,000 |
| Brisbane, Gold Coast, Sunshine Coast | $700,000 | $1,000,000 |
| QLD – other | $550,000 | $700,000 |
| Perth | $600,000 | $850,000 |
| WA – other | $450,000 | $600,000 |
| Adelaide | $600,000 | $900,000 |
| SA – other | $450,000 | $500,000 |
| Hobart | $600,000 | $700,000 |
| TAS – other | $450,000 | $550,000 |
| ACT | $750,000 | $1,000,000 |
| NT | $600,000 | $600,000 |
| Jervis Bay Territory and Norfolk Island | $550,000 | $550,000 |
| Christmas Island and Cocos (Keeling) Islands | $400,000 | $400,000 |
Can the RBA do anything about property prices?
At a press conference following the September RBA decision, Ms Bullock was asked whether the RBA's actions have exacerbated the housing affordability crisis.
From May 2016 to September 2022, the cash rate was below 2%, and some economists think this was a significant contributor to the rate of property price growth.
It's also been suggested that the RBA overstimulated the housing market in 2020 with the Term Funding Facility, introduced in response to the pandemic.
So far this cycle, cash rate cuts have correlated with rising property prices, but while Ms Bullock acknowledged Australia is in a "very difficult situation with the property market", it won't impact on future cash rate moves.
"I've said a number of times before the problem in the housing market is a structural deficit of supply," she said.
"The bottom line is all [the RBA] can do is keep inflation low and stable and keep employment as strong as possible."
Will the Housing Accord save the day?
The supply issues facing the Australian property market have been well documented, with the Albanese Government's ambitious plan to build 1.2 million new homes over five years now well underway.
So far, the rate of homes being built is not keeping pace with that target, and Ms Bullock said the impact from the initiative would be "slow to work its way through".
"I'm not confident [the Housing Accord] is going to make any impact in the next two years," she said.