By Tom Johnston, Lead Buyers Agent & Defence Property Specialist
National prices rose again in November, vacancy remains tight and investor finance rebounds — a mixed backdrop with selective opportunity.
Australia’s housing market continued its steady improvement through November, with national home values rising around 1.0% for the month, rental vacancy still sitting near record lows, and investor lending showing renewed momentum. The environment remains positive but selective, favouring investors who stay disciplined on yield, value and long-term fundamentals.
According to the latest Home Value Index data from Cotality (formerly CoreLogic), national dwelling values rose approximately 1.0% in November. This marks the third consecutive month of firm growth, although slightly below October’s stronger 1.1% rise. Perth again led the capitals with notable monthly performance, while Sydney and Melbourne saw moderate but steady increases.
A key driver behind price resilience is the continued shortage of sale listings. Total advertised supply across the major capitals remains well below the five-year average, reinforcing competition for quality homes in tightly held suburbs. Auction activity remained solid through late spring, although clearance rates softened slightly compared with early October — a sign that buyers are becoming more selective as prices lift and borrowing conditions remain tight.
SQM Research reports the national rental vacancy rate at roughly 1.2%, unchanged from recent months and still reflective of severe undersupply across many cities. Several capitals remain under 1%, particularly Adelaide and Perth, where tenant demand continues to outpace available stock.
Advertised rents have grown around 4–5% over the past year. While this is slower than the surge seen in 2022–2023, it still reflects a market with tight fundamentals. For investors, low vacancy provides confidence in tenant demand and leasing continuity, though rising property prices may modestly compress yields unless acquisitions are carefully selected.
ABS lending data shows a clear rebound in investor participation, with new investor loan commitments rising strongly over the past quarter. Investors now account for close to 40% of new dwelling finance — the highest share in several years. This shift is being supported by tight rental conditions, stabilising rates and improving price momentum.
However, affordability constraints continue to place pressure on many buyers. Higher dwelling values and serviceability buffers mean that borrowing power remains limited for some investors and first-home buyers. For those with adequate deposits and strong borrowing profiles, the current environment rewards careful selection and long-term planning.
From the perspective of Firm Foundations Property, current market conditions continue to reward disciplined, fundamentals-driven investors. The combination of rising home values, constrained supply and tight rental markets offers an opportunity for well-researched acquisitions. However, the market is not universally favourable — outcomes will differ significantly between high-demand, low-vacancy suburbs and oversupplied or softer-demand areas.
Our preferred strategy continues to emphasise: targeting mid-ring and outer-suburban houses with broad tenant appeal; prioritising locations with demonstrated population and employment strength; maintaining conservative cash-flow assumptions; and avoiding properties requiring substantial capital expenditure unless strategically justified. These principles help preserve resilience across different phases of the market cycle.
Overall, November’s data reinforces a market that is still gaining momentum: dwelling values are rising, rental supply remains extremely tight and investors are returning. While affordability and rate sensitivity remain risks, the conditions continue to favour those who focus on quality locations, strong tenant demand and long-term value creation. As we move into 2026, disciplined investors are well placed to benefit from the evolving landscape.
Contact: info@firmfoundationsproperty.com.au