Australian Property Market Report

October 2025 | Foresight Property Research

Key Market Insights

National housing values rose 0.8% in September, marking the strongest monthly gain since October 2023. The September quarter delivered a 2.2% increase, double the March quarter's 1.1% rise. Annual growth reached 4.8%, driven by robust capital city performance where values rose 0.9% in September. Record-low listing levels continue to fuel price growth, with advertised stock 18% below the five-year average while sales activity tracks 7.3% above average.

Australia (Quarterly)

+2.2%

Combined Capitals (Quarterly)

+2.3%

Combined Regionals (Quarterly)

+1.8%

Rental Yield Combined Capitals

3.4%

Australia (Annual)

+4.8%

Combined Capitals (Annual)

+4.3%

Combined Regionals (Annual)

+6.6%

Rental Yield Combined Regionals

4.4%

Capital Cities Performance

Capital City 3-Month Growth Annual Growth Rental Growth (Annual) Gross Yield Market Status Key Characteristics
Sydney +2.1% +3.0% +4.4% 3.0% Record High Accelerating quarterly momentum, premium resilience
Melbourne +1.0% +1.9% +1.8% 3.7% 2.7% below peak Continued recovery, improving conditions
Brisbane +3.5% +8.8% +6.4% 3.6% Record High Strong unit market, severe supply shortage
Adelaide +2.5% +6.2% +4.1% 3.6% Record High Sustained growth, affordability advantage diminishing
Perth +4.0% +7.5% +7.0% 4.2% Record High Leading growth, listings 45% below average
Hobart +0.1% +2.7% +6.9% 4.4% 9.5% below peak Minimal growth, rental strength continues
Darwin +5.9% +12.9% +8.9% 6.5% Record High Exceptional growth, listings 53% below average
Canberra +1.7% +2.5% +3.4% 4.0% 4.0% below peak Steady recovery, government employment stability

Regional Markets Performance

Regional Market 3-Month Growth Annual Growth Rental Growth (Annual) Gross Yield Market Characteristics
Regional NSW +1.0% +4.4% +3.0% 4.1% Steady growth, Tamworth leading at 12.4% annual
Regional Victoria +1.0% +3.2% +5.4% 4.3% Recovery strengthening, Mildura up 17.9% annually
Regional Queensland +2.7% +9.3% +6.8% 4.3% Strong mining-driven demand across regions
Regional South Australia +1.9% +10.4% +4.7% 4.7% Outstanding performance, Murray/Mallee up 12.6%
Regional Western Australia +3.7% +11.6% +10.3% 5.9% Mining boom, Albany leading at 19.7% annual growth
Regional Tasmania +0.9% +3.6% +2.7% 4.5% Modest growth, tourism sector support
Regional Northern Territory na na +4.1% 7.7% Limited data, volatile conditions

Regional Market Insights

Perth and Brisbane are pulling ahead with quarterly growth of 4.0% and 3.5% respectively, driven by unit market strength and severe supply constraints with listings 45% and 31% below average.
Darwin shows exceptional momentum with a 5.9% quarterly rise, achieving a new record high after 11 years with listings 53% below average creating intense competition.
Regional WA continues to lead annual growth at 11.6%, with Albany recording 19.7% growth driven by mining sector strength and lifestyle migration.
Regional Queensland and SA show strong performance at 9.3% and 10.4% annual growth respectively, benefiting from mining activity and affordability migration patterns.
Quarterly Growth by Capital City
Darwin
5.9%
Perth
4.0%
Brisbane
3.5%
Adelaide
2.5%
Sydney
2.1%
Canberra
1.7%
Melbourne
1.0%
Hobart
0.1%
Annual Growth by Capital City
Darwin
12.9%
Brisbane
8.8%
Perth
7.5%
Adelaide
6.2%
Sydney
3.0%
Hobart
2.7%
Canberra
2.5%
Melbourne
1.9%

Major Market Drivers

Growth Drivers

Record-Low Listings: Advertised stock 18% below five-year average, with Darwin (-53%), Perth (-45%), and Brisbane (-31%) showing severe shortages.
Interest Rate Relief: 75 basis point reduction since February improving borrowing capacity by approximately 7.0% and supporting consumer sentiment up 12.8% annually.
Strong Sales Activity: Quarterly sales estimates tracking 7.3% above five-year average demonstrating robust demand despite supply constraints.
Auction Market Strength: Clearance rates holding around 70% since mid-August, well above June quarter average of 63%.

Market Challenges

Affordability Pressures: Median dwelling-to-income ratio at 7.9 nationally, with Sydney at 9.6, limiting buyer pools despite rate relief.
Divergent Growth: Houses outpacing units in most markets (2.4% vs 1.7% quarterly), except Brisbane, Perth, and Hobart where unit supply is critically constrained.
Expanded Home Guarantee: New price caps effective October 1st may drive rapid appreciation in newly accessible suburbs, with 49.9% of houses and 93.2% of units currently below caps.
Regional Variation: Performance gap widening between mining-driven regions (WA, QLD) and amenity-focused markets (Tasmania, regional Victoria).

Rental Market Trends

Re-Acceleration Underway: National rents rose 0.5% in September (seasonally adjusted), taking quarterly growth to 1.4%, the strongest since June 2024.
Vacancy at Record Low: National vacancy rate fell to 1.4% with only 1.1% of units and 1.7% of houses vacant, creating intense competition among renters.
Rental Listing Shortage: Rental properties listed nationally tracking 25% below five-year average, constraining tenant options and supporting price increases.
Yield Compression: National gross yields declined to 3.65%, the lowest since November 2024, as values rise faster than rents with implications for CPI inflation.

Market Outlook

Spring Momentum: September's 0.8% monthly rise marks the strongest gain since October 2023, with spring selling season shaping up strongly as vendors claim the driver's seat amid record-low listings.

Continued Growth Expected: With quarterly growth accelerating from 1.1% in March to 2.2% in September, the growth trend is gaining momentum heading into year-end supported by lower rates and tight supply.

First Home Buyer Impact: Expanded Home Guarantee from October 1st likely to drive competition in newly accessible suburbs, potentially accelerating value growth near price cap thresholds.

Market Leadership Shift: Darwin, Perth, and Brisbane leading with quarterly growth of 5.9%, 4.0%, and 3.5% respectively, while Regional WA maintains strongest annual growth at 11.6% on mining sector strength.

Inflation Considerations: Rental market re-acceleration with 1.4% quarterly growth and record-low vacancies may present challenges for inflation trajectory given rental costs' large CPI weighting.

Data sourced from CoreLogic Monthly Housing Chart Pack October 2025 • This report provides general market information and should not be considered as financial advice