Cotality's national Home Value Index rose another 1.0% in November, marking the third month in a row where Australian home values have increased by one per cent or more. However, the pace of growth is moderating, coming down from 1.1% in October.
The headline growth figure was weighed down by Australia's two largest cities, with Sydney values rising 0.5% in November and Melbourne values up 0.3%. Every other capital city recorded a rise of at least 1.0% through the month, led by Perth with a solid 2.4% surge in values.
The Chairman and Owner of Century 21, Charles Tarbey, is not surprised by the slight moderation in prices due to Australia entering its yearly festive season.
"With Christmas, New Year and extended school holidays soon beginning across the country, listing a property for sale is likely not front of many for as many people as would usually be the case. I wouldn't be surprised to see further moderation in prices due to the season," said Charles Tarbey.
The moderating prices in Sydney, which has achieved 5.1% price growth on an annual basis, may have many people wondering whether Sydney is approaching 'price ceilings' where many people simply cannot afford property past a certain point due to affordability constraints.
Mr Tarbey believes it's more complicated than that and its unlikely there are any types of long term ceilings, "If there is a ceiling it won't be permanent. If you look at property prices over an extended period you'll see periods of price decline, growth and moderation but the one constant is that the trend line over extended periods is upwards."
Mr Tarbey has been in business since 1977 and says in all those years he has never had an employee ask for a salary reduction.
"Salaries do rise and this often means people can afford property or more expensive property."
Melbourne is the worse performing market for the quarter (to December) and the equal worse performing capital city market along with Canberra on an annualised basis.
Mr Tarbey believes that this may partly be caused by the negative media attention the state is garnering at present, but this situation could reverse very quickly.
"There has almost been wall-to-wall negative media coverage of some of the issues that Victoria has faced of late which has probably contributed to slow growth relative to the rest of the nation. However, I wouldn't be surprised to see Melbourne catch up soon and when it happens, it could happen very quickly."
The Australian Bureau of Statistics (ABS) has reported that Queensland is now the second state after New South Wales with a mean dwelling price of over $1 million.
Mr Tarbey believes that this growth is partly the result of governments helping to create a level of excitement and belief in the Queensland market.
"Queensland has a strong lifestyle brand at present. Price growth was also likely helped by a lot of investors selling in Victoria and purchasing in Queensland due to what they may perceive as more favourable tenancy laws and property taxes.
"That being said, price growth in Perth exceeded Brisbane's growth on annualised basis and Adelaide is not that far behind," said Charles Tarbey.
Cotality's research director, Tim Lawless, noted that growth in home values across the mid-sized capitals is once again diverging from the larger cities - a similar trend to the one seen in late 2023 and 2024.
"The skew towards the mid-sized capitals is especially evident in Perth, where listings are holding more than 40% below average, buyer demand is elevated and the 2.4% monthly rise in dwelling values has added just over $21,000 to the median in November, roughly $5,000/week."
Affordability metrics to the September quarter showed a record high in the national dwelling value to household income ratio (the median dwelling value is 8.2 times higher than the annual pre-tax household income) and near record levels of income required to service a mortgage at the median value (45.0%).
Mr Tarbey once again called for governments to look at ways to ease housing affordability challenges.
"Quite frankly, developers are still hamstrung by excessive amounts of government red, green and black tape. Considering the crisis we are in, you would think all of the tape would have been removed except for that which is absolutely necessary. Coupled with budget blow outs, I feel very strongly that governments need to be less involved in the market.
"Governments need to make it as easy as possible for private enterprise to build the properties that the country desperately needs or this crisis, especially in the context of immigration levels, may get a whole lot worse."