The key points are:
Cotality data shows national average home prices rose strongly again in November, but with the pace of growth slowing slightly to 1% mom.
Near record low vacancy rates is contributing to a pickup in annual rental growth to 5% yoy.
The lagged impact of rate cuts, the expansion of the 5% low deposit scheme and the startup of the Help to Buy scheme along with the ongoing housing shortage are expected to drive further gains in home prices next year.
However, the gains are likely to slow in 2026 as a result of poor affordability, the less favourable outlook for interest rates with the risk of a rate hike and APRA moving to ramp up macro prudential controls and likely to do more.
After around 8.5% growth this year we now expect property price growth to slow to around 5-7% in 2026.