Terry's View
The national sport of Australia is scapegoating, and nowhere is that rather sad part of our culture more in play than in the housing market. News media is saturating the nation with dire reports of the housing crisis and every day a scapegoat is held up before the national gaze to be shamed and castigated.
Eight Months Of Growth
Australia’s property prices have chalked up an eighth consecutive month of growth to reach a new record high. Data from PropTrack shows that median house prices rose 0.5% over August to reach $924,000, while median unit values are also up 0.5% to $683,000. The latest increases bring annual growth in the house market across combined capital cities to 5.1% and 4.5% across the unit market.
PropTrack senior economist, Eleanor Creagh, says the continuing growth means dwelling values have surged 50.4% in the past five years.
Darwin is continuing to push ahead, achieving the strongest median house price growth in the past 12 months of 10.2%.
Despite a slowdown in Perth transaction levels in recent months, it is still achieving strong house price growth of 8.9%, followed closely by Adelaide, 8.8% and Brisbane, 8.2%. Sydney’s median house price is up 3.8% in the past 12 months, Hobart is up 3.2% and both Melbourne and the ACT are up by 2.7%.
Creagh says the figures show that the housing upswing, once narrowly led by a handful of cities, is broadening and ushering in a more uniform phase of price recovery across the capital cities. “Demand has re-accelerated in Sydney and Melbourne, marking a turnaround from the slower conditions observed in late 2024. Darwin has swung from inertia in 2024 to leading annual growth amongst the capitals,” she says. “Prices in both capital cities and regional areas are sitting at record highs. While growth across the capitals has rebounded in 2025, regional markets remain resilient, supported by affordability and lifestyle appeal.”
Rents To Keep Growing
In good news for landlords, but not renters, capital city apartment rents are tipped to increase substantially in the next five years.
CBRE’s Apartment Vacancy and Rent Outlook predicts growth across 53 precincts in Australian capital cities by 2030.
It says 92% of two-bed apartments will have rents above $700 per week and a third will have rents above $1000 per week by 2030.
At the same time, it predicts that capital vacancy rates will fall to 1.1% by 2030, down from 1.8% in 2025.
“These tight conditions will endure as vacancy stays at around half of the previous decade's average of 2.5%,” it says.
According to CBRE analysis, high construction costs and better amenities are putting upward pressure on rents for new builds.
It says the future supply of apartments is likely to hover around 60,000 per year in the next five years, even though about 75,000 per year are required.
The report predicts Sydney will build about 11,700 per year (although it needs about 30,000), Melbourne will receive 9000 (it needs around 38,000) and Brisbane will deliver about 4600 (it needs around 16,000).
Cotality’s latest quarterly rent review shows that unit rents grew at a faster pace than house rents over the June quarter.
“The difference in rental growth trends across property types can partially be attributed to supply,” it says.
Tradie Shortage Drives Prices Up
Housing supply will remain an issue and building costs will continue to rise until something is done to improve Australian tradie numbers, according to the Housing Industry Association.
HIA Managing Director, Jocelyn Martin, says its modelling shows another 83,348 workers are needed across the top 12 trades in residential construction.
“The shortage of skilled workers is a major impediment to the supply of housing,” she says.
“Labour shortages are resulting in project delays, which add to the cost of construction.”
Australia is facing a chronic shortage of skilled workers, and competition for existing workers is becoming tougher.
“This competition is only expected to increase with a number of significant infrastructure and big build projects in the pipeline,” Martin says.
There are 343,640 apprentices and trainees in training across all sectors, with 100,000 of those in construction.
Martin’s comments come as the Australian Bureau of Statistics reveals the total number of dwellings approved fell 8.2% in July.
ABS head of construction statistics, Daniel Rossi, says despite the overall drop, New South Wales and Western Australia had the strongest rise in private sector house approvals, with both states up 3%.
Master Builders Australia CEO Denita Wawn says there is a slump in apartment approvals.
“Demand is there, but unless governments make it easier to get projects approved and more workers into the industry, that demand will remain unrealised,” she says.
Auction Clearance Rate Climbs
The winter auction market finished on a high last weekend, with volumes and clearance rates rising ahead of the start of the traditionally busy spring selling season.
There were 2251 properties offered for auction last week, a 9% increase on the previous week and the highest level since early June, according to Cotality.
In Melbourne, 1124 homes were taken to auction last week (up 14.1% from the previous week) with a clearance rate of 74.9%.
Sydney had 825, up 13.2% on the previous week, and its clearance rate (80.3%) passed the 80% mark for the first time since April 2024.
Auctions were down in Brisbane, with just 124 homes going under the hammer last week, but its clearance rate is beginning to claw its way back up and reached 64.5%.
In Adelaide, there were 106 homes auctioned, a 7.1% increase on the previous week, resulting in a clearance rate of 75%.
Cotality Research analyst, Caitlin Fono, says there are 2150 auctions already listed for the coming weekend and 2400 the following week.
She says vendors are entering spring in a strong position, with low competition and rising prices across nearly all regions.
Cotality Australia’s research director, Tim Lawless, says there is a clear mismatch between available supply and demand, resulting in further price growth.
According to Cotality data, advertised listings are 20% below average.
