January 2026
Australia’s housing market ended 2025 on a softer note, with Cotality’s national Home Value Index rising 0.7% in December — the smallest monthly gain in five months. While values continued to edge higher nationally, momentum clearly eased, with Sydney and Melbourne recording month-on-month declines of –0.1%. These two markets became the biggest drag on headline growth.
This marked the first monthly decline across Australia’s two largest cities since January last year, prior to the rate cuts that commenced in February. Every other capital city and broad rest-of-state region recorded price growth in December, although most markets experienced some cooling as 2026 approached.
Inflation has eased — but cost pressures remain
Australia’s inflation narrative has shifted, but for SME property developers, it hasn’t gone away.
Headline CPI has eased from the extremes of recent years, yet the cost pressures that directly affect development feasibility remain embedded. Construction, labour, insurance, compliance, and finance costs are all operating off a materially higher base than pre-2020 norms.
As we move into 2026, CPI is no longer the shock factor. Instead, it has become the baseline reality shaping how projects are structured, funded, and delivered.
Interest rate uncertainty weighs on confidence
According to Cotality Research Director Tim Lawless, the December result points to a shift in sentiment rather than a sudden deterioration in fundamentals.
CrowdProperty CEO David Ingram says this “translates into a market where borrowing costs remain higher for longer, holding costs are a material profit variable, and time delays directly erode developers’ margins.”
In this environment, the cheapest loan is often not the most effective. Certainty, speed, and alignment with project goals carry real financial value.
Renewed speculation that the rate-cutting cycle may be over — and that the next move from the RBA could be a hike — has dented housing confidence. A “higher for longer” interest-rate environment, combined with persistent cost-of-living pressures and worsening affordability, appears to be taking some heat out of buyer demand.
This uncertainty is likely to shape housing conditions in early 2026, particularly in highly leveraged and higher-priced segments of the market.
A strong finish to 2025 despite softer momentum
Despite the slower December outcome, 2025 was a strong year for Australian housing overall.
Nationally, dwelling values rose 8.6% over the calendar year, adding approximately $71,400 to the median dwelling value. This marked the strongest annual gain since 2021, when emergency-low interest rates drove a 24.5% surge in values.
Every capital city and rest-of-state region recorded growth over the year, with outcomes ranging from Darwin’s 18.9% increase to a more modest 4.8% gain in Melbourne. The market enters 2026 from a position of strength — albeit with momentum moderating.
Affordability shifts demand toward lower price points
One of the most consistent themes through 2025 has been the underperformance of the upper quartile of the market.
In December:
- Upper-quartile dwelling values rose just 0.2%
- Lower-quartile and middle-market values increased 1.1%
SME developers are increasingly prioritising smaller, repeatable products, reducing design and delivery complexity, and compressing construction and settlement timelines.
This trend has played out across every capital city. In NSW, we are starting to see the adoption of pattern books, with more than 21,000 patterns sold over the past six months at $1 each, and eight projects commencing construction in more affordable metropolitan suburbs.
Regional markets continue to outperform
Regional housing markets have remained more resilient than those in capital cities, even as growth moderated towards the end of the year.
Monthly growth across combined regional markets slowed from 1.2% in November to 1.0% in December — still double the pace of capital city growth (0.5%). Over the full year, regional values rose 9.7%, outperforming the 8.2% increase across combined capitals.
Regional Western Australia (+16.1%) and regional Queensland (+12.6%) led the way, while regional Victoria recorded the softest annual growth at 6.0%.
What this means for SME property developers
December’s CPI data points to a market that is cooling at the margin — not reversing.
Construction costs, including labour, professional services, materials, and holding costs, are stabilising but not falling. Inflation has lifted the overall cost base, raising the bar for what constitutes a viable development project.
The upside is improved predictability: while margins remain tighter, developers can now plan with greater confidence, provided feasibility assumptions are disciplined.
CrowdProperty Property Director Brian Cullen notes that “with costs remaining higher and feasibility margins thinner, errors are more expensive, and conservative assumptions matter more than ever.”
For SME property developers, the implications are clear:
- Attainable housing remains the strongest and most resilient demand segment
- Feasibility discipline is critical, particularly around pricing, contingencies, and exit strategies
- Location and local supply dynamics matter more than national averages
Importantly, while market sentiment may soften into early 2026, a material uplift in housing supply remains unlikely. This should help cushion downside risks to values, particularly in undersupplied sub-markets.
Ultimately, success in 2026 will be defined not by speculation but by conservative feasibility, realistic pricing, intelligent funding structures, and efficient project delivery.
Final thoughts: entering 2026 with discipline
Australia’s housing market is entering 2026 in a more measured phase following a strong 2025. The market continues to reward well-located, realistically priced, and feasible projects. For SME developers, the right funding structures are increasingly important.
At CrowdProperty, our expert team is proud to support developer clients through a changing market. This year, we will be further supported through our alliance with Aura Real Estate Credit, part of the Aura Group, enabling us to fund more new development projects as the market transitions into its next phase.
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
November 2025
Australia’s housing market continued its strong run into spring, with property values recording their fastest monthly gain in more than two years. Accelerating momentum, low supply, and policy support are combining to push national dwelling values higher as the year draws to a close.
Home Values Accelerate to Strongest Monthly Gain Since 2023
According to Cotality’s Home Value Index (HVI), Australian home values rose 1.1 % in October, marking the quickest monthly rise since June 2023. This acceleration has lifted the annual pace of growth to 6.1 % nationally, continuing a trend of steady recovery across housing markets.
“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.”
Every capital city and regional area recorded growth over the month, led by a 1.9 % surge in Perth, while Hobart saw a more modest 0.3 % rise. Across the combined capitals, the 1.1 % gain equates to just over AUD $10,000 added to the median dwelling value in October alone. Since February, capital‑city dwelling values are up 5.9 %, or approximately AUD $53,700.
Demand Outstripping Supply
Cotality’s data points to a continued mismatch between available supply and housing demand. At the national level, home sales are tracking 3.1 % above the previous five‑year average, while advertised supply over the four weeks to October 26 was 18 % below average.
“Such tight advertised supply levels against above‑average levels of demonstrated demand have skewed selling conditions towards vendors through spring.”
Auction clearance rates have eased slightly but remain above the decade average, holding in the high‑60 % to low‑70 % range since the start of spring — reflecting still‑strong buyer competition amid constrained stock.
Policy Support Bolsters Lower and Middle Segments
The step‑up in growth through October coincides with the expanded 5 % deposit guarantee scheme, which came into effect on October 1. This initiative has likely supported demand, particularly across the lower to middle price points of the market.
Across the combined capitals:
- Middle‑market values rose 1.4 % over the month
- Lower‑quartile values were 1.2 % higher
- Upper‑quartile values increased by 0.7 %
“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 investor activity, and a pickup in first‑home buyers taking advantage of the expanded deposit guarantee.”
Regional Markets Strengthen
Regional housing markets also posted solid gains, with the 1.0 % rise in October marking the strongest monthly increase across the combined regional markets since March 2022:
- Regional WA: +1.8 %
- Regional Queensland: +1.1 %
- Regional NSW: +1.0 %
These results highlight the broad‑based nature of housing growth, with both capital city and regional markets benefiting from the same supply‑demand imbalance and improved borrowing conditions.
Looking Ahead: Supporting Experienced SME Developers
As housing demand continues to out-pace supply, delivering well-located, quality homes remains a significant challenge across Australia. State and federal initiatives aimed at boosting supply are beginning to generate activity, but they are yet to translate into meaningful outcomes on the ground. September’s building-approval figure of 17,019 dwellings showed a 12% month-on-month lift and an 8.4% annual increase, yet the trend rise of just 0.9% highlights how modest the recovery remains when viewed in context.
With finance very often the next hurdle it is no surprise that CrowdProperty is seeing significant growth in borrower activity with originations increasing to over $170m in applications every month in the same period. Encouragingly, institutional investor appetite for commercial bridging and construction finance is also increasing, helping to bring the cost of capital down and enabling more viable projects to move forward.
Securing efficient, reliable funding for SME developers will be essential in the next phase of Australia’s housing response — especially for in-fill and medium-density projects that can add supply quickly. CrowdProperty is doubling down on supporting experienced developers, by providing specialist, flexible finance that is fast, simple and transparent, ensuring more quality homes can be delivered where they are needed most.
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
October 2025
Australia’s housing market is stepping into spring with renewed energy. After months of steady growth, the latest data shows property values gaining momentum, driven by record-low listings, strong buyer demand, and supportive monetary conditions. With supply still constrained and construction costs high, further gains in home prices are expected in the months ahead.
Property Values Gain Pace
According to Cotality’s latest report, national dwelling values rose by 0.8% in September, marking the largest monthly increase since May 2024. The annual growth rate has lifted to 4.8%, the highest in over a year. Tim Lawless, Cotality Australia’s research director, highlighted that the ongoing imbalance between supply and demand is the main driver of rising prices.
“Once again, a clear mismatch between available supply and strong buyer demand is putting upward pressure on housing values,” Lawless said. “Advertised listings remain about 20% below the five-year average for this time of year, creating a highly competitive market environment.”
Cheaper borrowing costs, following the Reserve Bank of Australia’s (RBA) recent interest rate cuts, are helping to support buyer activity. Growth in real wages and the Federal Government’s First Home Buyer Guarantee Scheme have added further momentum, particularly in more affordable suburbs and regional areas, where buyers are competing for limited stock.
Construction Sector Challenges
Despite strong buyer demand, the construction sector continues to face hurdles. Rising prices for key materials such as concrete, bricks, and plasterboard, combined with labour shortages and delivery delays, are still putting pressure on new builds. The Productivity Commission report from earlier this year that found dwellings completed per hour by housing construction workers have fallen by 53% over the past three decades.
Looking ahead, construction cost escalation is expected to remain elevated through 2027, particularly in locations with significant public infrastructure projects, including the Olympics in Brisbane, which is leading with increased forecasts at 7%. Sydney and Melbourne are projected to experience increases around 4.50%, influenced by slower project pipelines, while Perth is expected to track at 5.75% in 2025, easing to 4.75% by 2027. Niall McSweeney and Cody Bui from Altus Group noted that “international material prices may be softening, but locally intensive inputs continue to rise as projects run longer and consume more labour per unit of output. This contributes to high construction costs and can slow the delivery of new homes.”
While there is little sign of construction cost coming down, they are at least returning to normal growth level making feasibilities more accurate.
SME Developers and Financing Opportunities
Thee recent planning reform such as those in NSW allowing increasing density in low-density zones (R2), encouraging diverse housing like terraces and townhouses near transport hubs, as well as faster complying development pathways is driving significant increase in activity. David Ingram, CrowdProperty founder and CEO remarked that “CrowdProperty has seen an increase of $100m in loan applications every month for the last quarter, hopefully an early indication of more residential development activity to come over the next year.”
For SME developers delivering residential project, access to flexible bridging finance remains an important tool. This type of funding can help developers act when timing is critical, whether securing a new site while approvals are underway or freeing up capital from projects nearing completion. It enables developers to maintain momentum and navigate the ongoing challenges of high land and construction costs, without being held back by traditional funding timelines.
Looking Ahead
Looking forward, the market is expected to continue its upward trajectory, though growth will vary across regions. Sydney and Melbourne are experiencing steady price gains, while some regional markets are seeing more pronounced growth as buyers look for more affordable options outside major cities. First home buyer demand is likely to remain strong in affordable suburbs, which will gradually spill over into upgrader markets over time. While growth may slow in some areas, the overall trend points to continued value increases across the nation.
Spring 2025 is shaping up to be a season of opportunity for both buyers and developers, as strong demand meets constrained supply and financing solutions help projects progress despite ongoing challenges in the construction sector.
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
