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The Australian Property Market Update: September 2025

Updated: Nov 3

National Overview of Property Values


The Australian property market is gaining strength as we move further into spring. September marked the strongest monthly gain for national dwelling values since October 2025.


Nationally, dwelling values rose 0.8% in September. This increase was led by a 0.9% rise across the capital cities. On a quarterly basis, values were 2.2% higher, up from a 1.5% lift in the June quarter. This is double the 1.1% increase recorded over the three months to March. In dollar terms, the September quarter rise was equivalent to just over $18,000 being added to the median dwelling value. Growth has become broad-based, with every capital city and regional area recording an increase in dwelling values over the month, quarter, and year.


However, some divergence in the pace of growth is beginning to re-emerge. Perth and Brisbane are leading the way, with values up 4% and 3.5% respectively through the September quarter. This growth is primarily driven by the unit market. Darwin has shown even stronger momentum, with housing values jumping 5.9% over the past three months. Each of these cities continues to face a severe shortage of advertised supply. At the end of September, the number of homes for sale was approximately 53% below average in Darwin, 45% lower in Perth, and 31% down in Brisbane. Meanwhile, quarterly home sales are tracking above average, highlighting the ongoing imbalance between supply and demand.


Home values have risen across all price brackets. However, the strongest pace of growth has shifted from the lower quartile to the broad middle of the market. This trend likely reflects increased borrowing capacity due to lower interest rates, which is supporting demand at slightly higher price points across the combined capitals.


  • Lower quartile dwelling values: up 2.6% in the September quarter

  • Middle market values: up 2.7%

  • Upper quartile values: up 1.8%


Rental Market Update


The national vacancy rate slipped to a new record low in September. Only 1.2% of units and 1.7% of houses were estimated to be vacant and available for lease. This tightening in vacancies has been accompanied by a reacceleration in rental growth. The national rental index rose 0.5% in seasonally adjusted terms through September and 1.4% over the quarter. This marks the highest quarterly rise since June last year. Unfortunately for renters, listings continue to trend lower, sitting about 25% below the five-year average in September.


Melbourne Market Update - Mitchell Torre


Melbourne home values recorded their eighth consecutive month of growth in September, rising 0.5%—up from 0.3% growth in each of the previous two months. Despite these consistent gains, Melbourne remains at the softer end of the growth spectrum. Values are increasing at a slower pace than the combined capital cities benchmark of 0.9%.


On the positive side, Melbourne continues to offer greater affordability compared to other major capitals. The median dwelling value was $885,880 in September. Notably, the gap between Sydney and Melbourne home values hasn’t been this wide since May 1999.


National Market Analysis


The spring selling season is shaping up strongly. Vendors are firmly back in the driver’s seat. Low advertised stock levels and high buyer demand are creating solid selling conditions. This is likely to lead to further price growth through the remainder of spring and into year’s end.


The 75 basis point cut to the cash rate has played a key role in supporting housing activity. Borrowing capacity for a median household income of $106,000 has increased by around 7% since the first rate cut in February. Lower interest rates have also lifted consumer sentiment, a crucial factor for major financial decisions. Despite a slight dip in September, the consumer sentiment index remains 12.8% higher than a year ago. This aligns with a noticeable rise in purchasing activity.


Real wages growth, now sitting at 1.3% per annum, has reached its highest level since June 2020. This is around two and a half times the pre-COVID decade average of just 0.5% per annum. Stronger wages growth, alongside lower debt servicing costs, is helping to boost both confidence and savings.


The jobs market remains another key support for housing demand. The unemployment rate held steady at 4.2% in August, while underemployment at 5.7% is the lowest since 1991. Although a gradual loosening of the labour market is expected, these low rates combined with real income growth continue to underpin buyer confidence and demand.


Government Incentives and First Home Buyers


The expanded Home Deposit Guarantee, which came into effect on 1 October, is opening doors for first home buyers. They can enter the market with as little as a 5% deposit, without the additional cost of lenders mortgage insurance. This initiative is expected to drive stronger demand in areas around the new price caps. As of the end of September:


  • 50% of Australian suburbs had a median house value at or below the new price caps.

  • 93% of suburbs had a median unit value at or below the caps.


It’s anticipated that house values in desirable, newly eligible areas could quickly surpass these thresholds.


Looking Ahead


While the outlook for the housing market remains positive, several headwinds could temper the pace of growth. Housing affordability remains stretched. The national dwelling value-to-household income ratio is at 7.9, only slightly below record highs. In Sydney, the ratio sits as high as 9.6.


Additionally, a higher-than-expected inflation reading for August has reintroduced uncertainty around the timing and extent of future interest rate cuts. There’s plenty to watch as we progress through spring. Strong fundamentals are balanced by affordability pressures and broader economic factors.


Interested in a Suburb-Specific Report?


If you’d like a detailed report on your suburb, or wish to organise an obligation-free market appraisal of your property, please get in touch using the details below or follow the link provided.


Thomas French

Mitchell Torre

Executive Sales Consultant

📞 M: 0415 558 101


Disclaimer: All statistics and data referenced in this update are sourced from CoreLogic Australia. While every effort has been made to ensure the accuracy and reliability of the information presented, Mitchell Torre Real Estate accepts no responsibility for any loss or damage arising from the use of this information. Readers are advised to conduct their own research before making any property-related decisions.

 
 
 

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