Peak property prices: regional housing values growth highest since early 2023

Home prices across regional Australia have grown more in October than in any month since March 2023, new data shows.

Nationally, home values grew by 1.1 per cent for the month of October, and in regional Australia, they grew by 1.0 per cent according to the Cotality Home Value Index.

"Regional markets posted a solid rate of growth in October," said Cotality Research Director Tim Lawless.

Regional markets in NSW, Queensland, South Australia, Western Australia and Tasmania have now reached record prices.

Only regional Victoria, down -3.6 per cent and regional Northern Territory, down -8.2 per cent, have seen prices fall from their peak.

Regional WA recorded the strongest rise, with a 1.8 per cent increase in values, followed by Regional Qld up 1.1 per cent and Regional NSW with a 1.0 per cent lift.

Reflecting national trends, it was the middle to lower end of regional markets that saw such growth, including areas with strong employment opportunities with infrastructure and mining projects.

"The more affordable rural market areas around the wheat belt of WA and Townsville and Mackay in Queensland all show a market-leading pace of annual growth for regional areas," Mr Lawless said,

"I think that's reflective of both the affordability of those markets, but also the fact that their local economies tend to be quite strong."

<img src="https://cue.wanews.com.au/webservice/thumbnail/article/20557039" id="_427054e7-eb9a-4db0-bd6b-99f9ec7b9386" alt="Not Supplied" caption=""The first rate cut in February marked a clear turning point," said Cotality Research Director Tim Lawless." credit="View">

Meanwhile, high-end lifestyle zones, such as NSW's Byron Bay region and Southern Highlands, have fallen off the top price growth areas.

"There was the trend of lifestyle markets outperforming through the pandemic and that seems to be behind us now," Mr Lawless said.

"Byron Bay is a great example, where it probably overshot the mark of where the value should be through the pandemic.

"The Southern Highlands is another good example of a regional market that is well below its record highs as well."

Why are prices on the rise?

Mr Lawless said home values had been on the rise since the first RBA rate cut in February this year.

Momentum has been building in the rate of housing value growth since the first rate cut in February, pushing the annual pace of growth to 6.1 per cent nationally.

"Before the February rate cut, housing conditions were losing momentum, even recording flat to falling values through late 2024 and January 2025," Mr Lawless said.

"The first rate cut in February marked a clear turning point, with home values moving through a positive inflection across most regions and gathering steam since then."

He said that there are many factors contributing to the price growth, but low supply remained the most stubborn problem.

At the national level, advertised supply levels over the four weeks to October 26th were 18 per cent below average, according to Cotality data.

First home buyer impact

The step up in growth rates also coincides with the expanded 5 per cent deposit guarantee scheme going live on October 1st, which has likely added to housing demand, especially around the lower to middle price points of the market.

"Stronger housing demand at the lower price points is likely a culmination of serviceability constraints eroding purchasing power, persistently higher than average levels of investor activity, and what is likely a pickup in first home buyers taking advantage of the expanded deposit guarantee."

What's next

The latest data is released on the eve of the Reserve Bank's November interest rates meeting.

"I think most people would be anticipating that the decision from the RBA will be one to hold, and we're increasingly seeing economists pushing out their rate-cutting forecasts to maybe only one or two next year," Mr Lawless said.

He said higher price rises in the lower and middle end of the property market also showed interest rate cuts were no longer having such an impact on home buyers.

"Even just the fact that we're seeing housing values rising so rapidly, particularly for a median or lower income household, the benefits of lower interest rates have already been washed out by higher prices."