It’s insightful to look at the recent shifts in the Australian property landscape, particularly the surge in value and the expanding gap between detached houses and units. Drawing on the Cotality November Monthly Housing Chart Pack, we can outline how the market has surpassed the $12 trillion milestone faster than anticipated while simultaneously witnessing a record high “house premium”.

The $12 Trillion Milestone and Geographic Shifts

The total value of Australia’s residential property market reached an unprecedented 12 trillion through October, exceeding expectations. This value is substantial, being more than double the size of the market a decade ago. Residential realestate forms the bed rock of Australian wealth, towering over other assets such as Australian super annuation(4.3 trillion) and Australian listed stocks ($3.6 trillion). Most of the growth—approximately $5 trillion—has occurred over the past five years.

Amid this overall growth, the geographical composition of wealth has shifted. States like South Australia, Western Australia (WA), and Queensland (QLD) have captured a larger share of the combined housing value. WA, QLD, and SA saw dwelling values rise by 85.0%, 80.1%, and 78.3%, respectively, over the past five years. Conversely, New South Wales and Victoria now make up a smaller share than five years ago. In fact, Victoria experienced the largest drop-off in market share, falling from 29% five years ago to less than a quarter as of October.

The Record House Premium

A significant structural shift underpinning this growth is the increasing premium commanded by detached houses over units. The premium for a house in Australia’s combined capital cities has risen to approximately 363,000, reaching a series high. This equates to a premium of 49.9728,000). For comparison, this premium has increased substantially from just 20% five years ago.

The sustained demand for houses has fueled stronger growth in detached houses, with values rising 3.1% over the three months to October, compared to 2.3% for units. This long-term outperformance is fundamentally tied to the associated land value. Cotality Economist Kaytlin Ezzy suggested that “price sensitivity appears to have blown out through the strong growth cycle over the past five years”. While the house price premium averages nearly 50% across the combined capitals, it varies significantly, from 31.6% in Hobart to a commanding 77.8% in Sydney.

Market Dynamics and Affordability

Affordability constraints are heavily dictating growth patterns across the market. The strongest appreciation across most capital cities is now being driven by the lower-to-middle value segments (the lowest 25% or middle 50% of market values). This nearly two-year trend reflects buyers seeking more accessible price points.

Quarterly growth in national dwelling values has gained momentum, rising 2.8% over the three months to October. Growth leaders include Darwin and Perth, both seeing 5.4% quarterly growth, followed by Brisbane at 4.9%. Market conditions are skewed in favor of sellers due to low stock levels and rising buyer activity. This is demonstrated by the national median vendor discount rate falling to its lowest level in over three and a half years at 3.1%.

This persistent growth in lower-value segments was noted as somewhat surprising, given there were three rate cuts in 2025. Ms. Ezzy suggests that the total easing of 75 basis points, following a tightening cycle of 425 basis points, may not have been sufficient to push demand back into the high end of the market, where rate cuts usually have a greater impact.

The market momentum shows that property remains a powerful asset class, with the escalating house premium acting like a widening river, indicating the high value placed on owning detached land and driving growth faster than expected.