The Australian residential property market has recently reached a significant valuation milestone, underpinning Australia’s wealth. According to Cotality’s October Monthly Housing Chart Pack, the total value of residential real estate has climbed to $11.8 trillion for the first time, reflecting an increase of $678 billion over the past 12 months. Cotality’s Head of Research, Eliza Owen, highlighted that this $11.8 trillion figure demonstrates the clear resilience of the Australian property market. Based on current trajectory, if the property market maintains its pace of growth, it is possible the combined market value could hit $12 trillion by the end of the year.

The national price momentum driving this valuation increase has been building steadily. Dwelling values saw a 2.2% increase over the three months to September, which marks the largest quarterly rise since May 2024 (which also saw 2.2% growth). Furthermore, the annual growth trend has shifted higher for the fourth consecutive month, rising to 4.8% in the 12 months to September, up from a low of 3.7% over the 2024-25 financial year. This momentum is seen rippling from the lower quartile (2.4% growth) to the broad middle of the market (2.5% growth), where dwellings are valued nationally between $648,000 and $1.2 million.

The strong momentum has been largely influenced by markets responding robustly to lower borrowing costs and tight supply conditions since the first interest rate cut in February. Darwin markets are setting the pace for capital growth, with city home values up 13.4% through the year to date. Darwin’s dwelling values surged 5.9% in the September quarter. Specific Northern Territory suburbs, like Wanguri and Durack, led the nation with outstanding growth of 20.1% between the end of February and September 2025. This regional strength is attributed to relative affordability, extremely low levels of housing supply, and a notable lift in investment activity.

Beyond Darwin, the growth has been led by other ‘mid-sized’ capital cities, including Perth (4.0% growth), Brisbane (3.5% growth), and Adelaide (2.5% growth) in the September quarter. Buyers are increasingly targeting affordable land and housing across the country, leading to strong performances in affordable regional markets such as Boggabri (NSW) and Rochester (Victoria), both having median dwelling values below $400,000.

Conversely, Sydney and Melbourne have accounted for the majority of areas experiencing a dip in value since the rate cuts began. The largest declines were concentrated in inner-city, lifestyle suburbs with high-density unit stock. Milsons Point in Sydney recorded the greatest fall at -7.1%, with Kirribilli close behind at -6.3%.

Overall selling conditions are improving, evidenced by the vendor discounting rate shrinking from 3.3% last year to 3.2% in the three months to September 2025. Furthermore, despite a subtle rise in listings recently, total stock levels remain tight, sitting 19.3% below the historic five-year average for this time of year, contributing to the continued upward trajectory in housing values.