Double-digit house price growth arrives ahead of expectations

Australian house prices rose again in October, confirming that the housing market has regained remarkable strength. Nationally, the median house price increased 1.1 per cent to $940,000, pushing annual growth to 10.6 per cent, the first double-digit annual rise since the pandemic boom of 2021-22. Unit prices rose even more strongly over the month, up 1.4 per cent to $710,000, with annual growth now at 9.2 per cent.

In our September report, we noted that double-digit annual growth was likely to be confirmed by the end of the year. That milestone has come sooner than anticipated, driven by stronger-than-expected October gains and continued tight supply across most markets. This underscores how resilient demand has remained through spring.

The recovery remains broad-based. Perth (+14.8 per cent), Brisbane (+12.5 per cent) and Adelaide (+10.8 per cent) continue to lead the capital-city markets, while Sydney (+8.6 per cent) and Melbourne (+6.5 per cent) maintain steady, consistent growth. Regionally, strength remains particularly evident in the resource-focused states, with Regional Western Australia (+16.4 per cent) and Regional Queensland (+14.5 per cent) among the standout performers.

Units again outpaced houses this month, reflecting the growing influence of affordability constraints, the impact of the first home buyer incentives launched at the start of October and an acute shortage of stock. The largest monthly increases were recorded in Perth (+1.6 per cent), Adelaide (+1.5 per cent) and Brisbane (+1.4 per cent), while lifestyle markets on the Gold Coast and Sunshine Coast both rose 1.1 per cent. Melbourne’s unit market also strengthened (+1.6 per cent), suggesting renewed buyer interest at lower price points. Sydney and Canberra were largely steady following earlier gains.

The national price trend shows remarkable consistency. For houses, monthly increases have been recorded every month since February, while unit prices have risen each month since March. The pace of growth through October indicates that spring demand has not been dampened by higher supply, with new listings still insufficient to meet buyer interest.

This report has been released on the eve of the Reserve Bank’s Melbourne Cup Day meeting, where the cash rate is almost certain to remain on hold at 3.60 per cent. Although the September-quarter inflation data surprised slightly to the upside, the RBA continues to weigh that against a gradual softening in labour market conditions, with unemployment now around 4.5 per cent.

With house prices now 10.6 per cent higher than a year ago and units up 9.2 per cent, 2025 is on track to close with high single- to low double-digit annual growth nationally – an outcome stronger than forecast even a month ago. Smaller capitals and regional areas are expected to remain the key outperformers into early 2026, supported by population growth, tight supply and comparative affordability.