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.
September 2025
Australian home prices saw growth rates accelerate in August, on the back of strong demand driven by rate cuts and growth in real wages.
Further gains in home values are expected, as supply remains constrained by high costs and ailing productivity in the construction sector.
Home price growth rises to highest level in over a year
Cotality’s Home Value Index posted an increase of 0.7 percent in August, for the largest monthly rise since May 2024. The annual change in Australian dwelling prices has lifted to 4.1 percent as a result.
Tim Lawless, Cotality Australia’s research director, pointed to demand continuing to outpace supply as the primary driver of nationwide housing price gains.
“Once again we are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values,” Lawless said.
“The annual trend in estimated home sales is up two percent on last year and tracking almost four percent above the previous five-year average. At the same time, advertised supply levels remain about 20 percent below average for this time of the year.”
The momentum generated by the Reserve Bank of Australia’s (RBA) current cycle of rate cuts has played a critical role in boosting demand.
The RBA made its third cut to the target rate in 2025 at its August meeting, with a 0.25 percentage point reduction that took the cash rate to 3.6 pecent – its lowest level since April 2023.
Other factors contributing to stronger demand from buyers include growth in real wages, mounting confidence, as well as a keen sense of urgency over the tightness of advertised levels.
Construction costs mount as productivity dwindles
The still heady costs for the construction of new residential properties are also contributing to strong growth in Australian dwelling values.
Altus Group’s Q2 2025 Australian Construction Price Outlook found that Australia’s locally intensive inputs have continued to climb in cost as a result of labour and delivery pressures. These inputs include key construction materials such as concrete, bricks and plasterboard.
The Altus report said that long-term ailing productivity is also a key contributor to the onerous cost of materials and new home builds.
According to the Productivity Commission’s findings from earlier this year, the number of dwellings completed per hour by housing construction workers has fallen by 53 percent over the past three decades.
“We are working more hours, paying more and delivering less,” wrote Niall McSweeney and Cody Bui, authors of the Altus report.
“That shows up in material costs…international prices are softening, yet locally intensive inputs keep rising.”
Output prices for building construction saw a 0.7 percent rise in the June quarter, driven more by labour-led pricing and capacity constraints than materials.
McSweeney and Bui said the only way to deal with the issue is to drive meaningful gains in Australia’s construction sector productivity.
“International material prices can fall, but if projects run longer and consume more labour per unit of output, locally intensive materials will stay high.”
SME developer margins under pressure
CrowdProperty CEO David Ingram said that while the national headlines highlight strong price growth, SME developers are navigating a far tougher environment.
“Land and construction costs remain elevated, and productivity challenges across the sector continue to erode margins,” Ingram said.
“For SME developers — who play a vital role in delivering the diverse, small- to mid-scale projects Australia needs — access to competitively priced capital is absolutely critical. As our SME Developer Survey showed earlier this year, developers face land and new site acquisition cost challenges and margins are being squeezed like never before. Unless the cost of funds comes down, many otherwise viable projects won’t proceed, and the supply gap will only widen.”
Brian Cullen, Property Director at CrowdProperty, said experienced developers are finding it increasingly difficult to make projects stack up.
“Rate cuts may be fuelling demand, but rising input costs and falling productivity mean every basis point in funding costs makes a real difference to whether a project goes ahead,” Cullen said.
“We’re seeing very strong appetite from quality SME developers, particularly in the $5–15 million project range, but the reality is that margins are razor thin. Without access to fair and efficient finance, these projects stall.”
Housing prices set to rise further on strong demand
John Lindeman, CEO, Property Power Partners, expects Australia’s nationwide dwelling values to continue to rise on the back of strong demand driven by multiple factors, including the RBA’s rate cuts and the federal government’s property policies.
“The recent and further expected interest rate falls plus the bringing forward of the Federal Government’s First Home Saver Guarantee Scheme are likely to generate more buyer demand in virtually all locations, especially first home buyer suburbs in capital and major regional cities,” Lindeman said.
“These locations are likely to experience the biggest lift in demand and strong price growth in the most affordable suburbs.”
Lindeman expects this rise in first home-buyer demand to then spill-over and have a slow burn impact on other segments of the market.
“This will lead to an increase in buyer demand for upgrader suburbs over the next few years, especially in Sydney and Melbourne,” he said. Much of this will occur as recent first home buyers decide to upgrade, so the effect on prices will be less and take longer.
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.
August 2025
Australia’s housing market managed to rack up its sixth consecutive month of price gains in July, despite the Reserve Bank of Australia (RBA) shock decision to put a pause on rate cuts.
Further reductions to interest rates are viewed as inevitable, however, and are set to drive a rise in dwelling values, given ongoing failure to expand housing supply despite the federal government’s ambitious targets.
Home price growth maintains momentum in July
National dwelling values posted a 0.6 percent rise in July, bringing the current cycle of price gains to its sixth consecutive month, according to figures from Cotality.
Price movements for the Australian housing market first turned a corner in February, when the Reserve Bank of Australia (RBA) kicked off its current cycle of interest rate cuts.
The RBA’s shock decision to hold off on a rate cut in July didn’t put a dent in the steady momentum of home price gains. The rate of nationwide price growth in July was on par with gains for the preceding two months, with all of Australia’s capital cities posting increases.
Darwin led the pack with an on-month rise of 2.2 percent, while Hobart came in last, with housing prices in the Tasmanian capital edging higher by just 0.1 percent.
Sydney saw its dwelling values rise 0.6 percent, while in Melbourne they rose 0.4%.
Tim Lawless, Cotality’s research director, said nationwide home price growth received a boost from a combination of low supply and declining interest rates, which help to drive a rise in confidence. This helped to overcome the headwinds of affordability constraints and ongoing uncertainty.
Lack of supply is evidenced by the fact that national listings are tracking -19% beneath the previous five-year average for this time of year.
Demand is comparatively robust, however, with Cotality estimating that annual sales are tracking around 1.9% above the previous five-year average.
August rate cut
The Reserve Bank’s decision to cut the cash rate by 25 basis points to 3.60 percent will add further momentum to housing demand already underpinned by low supply. While cheaper borrowing will improve project feasibility for developers — particularly SMEs — the benefits risk being offset by rising land prices, labour shortages and slow approvals. Without addressing these supply-side constraints, the uplift in demand from lower rates may simply put more upward pressure on prices rather than delivering the volume of new homes needed.
While welcoming the latest rate cut, CrowdProperty CEO David Ingram said the interest rate was only part of the solution to more home construction.
“Our latest SME developer survey shows that rising land costs have now overtaken finance as the number one barrier for small-scale developers,” Ingram said.
“62.5 percent of respondents ranked it in their top three challenges, nearly double the proportion from two years ago. With listings almost 20 percent below average, these cost pressures are choking the supply of the very infill housing our cities urgently need,” he said.
“The RBA’s August rate cut will help on the finance side, but it’s only part of the solution. Cheaper money doesn’t make land any less expensive or approvals any faster. We need targeted policy and funding measures that enable SME developers to compete for sites and bring projects to market more quickly.
“SME developers are the backbone of Australia’s infill housing supply. They’re agile, able to deliver in well-located areas, and they can scale up quickly if given access to affordable sites, planning certainty, and fit-for-purpose finance. Without unblocking these constraints, even a supportive interest rate environment will leave us short of housing targets.”
Leading economists point out that supply growth continues to disappoint, despite the National Housing accord target of building 1.2 million new well-located homes by the end of the decade.
HIA senior economist Tom Devitt highlights the gap between the demand about to come online as a result of rate cuts and the laggard condition of building starts.
“Interest rate cuts from the Reserve Bank in February and May this year, and now August, will help bring more potential homebuyers back to the market in the lagging – and often more expensive – states and territories,” Devitt said.
“Even with lower interest rates, Australia is set to start just 200,000 homes per year, on average, over the next four years.”
“Multi-unit activity, in particular, needs to do more heavy lifting. Multi-unit commencements need to double from current levels in order to achieve the government’s housing targets.”
John Lindeman, CEO, Property Power Partners, highlights the role of inflation and insufficient labour supply in holding back efforts to expand housing volume.
“The key issue is that we are simply not building enough new homes,” Lindeman said.
“Australia needs around 270,000 new dwellings a year to meet population demand.”
“Treasury has revealed, however, that construction costs, tradie shortages and the complexity of development approval processes mean that the Federal Government will not meet its (already inadequate) Housing Accord target of 240,000 annual completions without a substantial lift in funding.”
“Similar to other government initiated housing schemes, this is increasingly looking like another window dressing stunt.”
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.
