By Tom Johnston, Founder and Lead Buyers Agent
Australia's national dwelling values rose 1.1% in October, vacancies held near 1.2% and investor lending jumped near 40%.
Australia’s housing market continued its upward trajectory in October, with national dwelling values rising 1.1% for the month. Rental conditions remain extremely tight, with the national vacancy rate sitting near 1.2%, and investor lending has climbed to its strongest levels since the mid-2010s. Conditions continue to favour investors who remain selective, data-driven and yield-focused.
According to CoreLogic’s October Home Value Index, national dwelling values increased by approximately 1.1% in October 2025, the strongest monthly rise since mid-2023. Perth led the monthly gains at around 1.9%, while Sydney and Melbourne posted rises of roughly 0.7% and 0.9% respectively.
CoreLogic also reports that total advertised listings across the combined capitals remain significantly below average—estimated to be around 18% under the five-year trend. This persistent lack of stock continues to place upward pressure on prices, particularly in middle-ring suburbs where family-home demand remains strong.
Auction markets saw solid performance throughout spring. Clearance rates across the major capitals held in the high-60s to low-70s, according to Domain’s weekly auction summaries. Buyer competition has remained firm, especially for well-presented homes in established suburbs where supply remains tightly constrained.
SQM Research reported the national residential vacancy rate at approximately 1.2% in October, unchanged for several months and still well below the long-term average. Several capitals remain even tighter—Perth’s vacancy rate hovered around 0.7%, while Adelaide sat close to 0.8%—indicating ongoing structural undersupply in key rental corridors.
National advertised rents rose around 4–5% over the past 12 months. Though slower than the rental surges seen during 2022–2023, this level of growth still reflects a mismatch between rental demand and available stock. Investors are continuing to experience short vacancy periods and dependable tenant demand, particularly in family-home markets and employment-rich regions.
According to the Australian Bureau of Statistics’ latest lending statistics, investor loan commitments rose strongly throughout the September quarter. Both the number and value of new investor loans increased in double-digit percentage terms, lifting the investor share of new dwelling finance to nearly 40%—a level last seen in the mid-2010s.
This rise in investor activity aligns with improving price momentum, consistently tight rental conditions and expectations that interest rates are likely to stabilise through 2026. Many investors are repositioning to secure properties with reliable rental performance while broader market confidence strengthens.
From the perspective of Firm Foundations Property, the current environment presents meaningful buying opportunities, particularly for investors targeting areas with extremely low vacancy, strong tenant demand and limited new-supply pipelines. Fundamentals remain the priority: employment access, local infrastructure, population growth, and stock scarcity all matter more than short-term market noise.
This is a market where selectivity matters. Well-located, low-maintenance homes offering broad tenant appeal and stable rent profiles outperform speculative or renovation-heavy options. With competition increasing, investors should remain disciplined on price, yield expectations and long-term strategy.
Australia’s housing market remains firmly in a growth phase, supported by rising values, strong rental conditions and increasing investor participation. For disciplined investors with clear criteria and a long-term outlook, the next 12 months present attractive opportunities—provided decisions are guided by local fundamentals and precise due-diligence.
Contact: info@firmfoundationsproperty.com.au