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Australia's Housing Market Climbs 1.2% in November as Median Price Hits A$1,112,000

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  Published in House and Home on Sunday, November 30th 2025 at 23:45 GMT by socastsrm.com
      Locale: AUSTRALIA

Australia’s Housing Market Sees a November Upswing, Yet Affordability Hits Record Low – A Summary of the Latest Report

In a recent update on the Australian residential property market, data released by the Australian Bureau of Statistics (ABS) show that house prices rose for the eleventh month in a row, with a 1.2 % increase in November. While the trend suggests sustained demand, the accompanying commentary from Cotality—a leading real‑estate analytics firm—warns that affordability has reached an all‑time low, posing a significant challenge for prospective buyers and policymakers alike.

1. November Price Movements: A Closer Look

The ABS’ “Residential Price Index” (RPI) reported a 1.2 % month‑on‑month climb in the median house price, bringing the average value of a dwelling in Australia to A$1,112,000. Over the past twelve months, prices have appreciated by roughly 12 %, which, according to Cotality, places the market at the upper end of historical growth rates.

• Geographic Breakdown
  - Sydney: The median price edged up by 1.4 %, reflecting continued investor confidence in the city’s prime and outer‑suburban segments.
  - Melbourne: Prices increased 1.0 %, with a noticeable uptick in the capital’s south‑eastern suburbs.
  - Brisbane & Perth: These states saw marginal gains (0.8 % and 1.1 % respectively), buoyed by demand for larger lot sizes and affordable land.
  - Canberra: The national capital experienced the most modest growth at 0.6 %, driven by a stable demand‑supply dynamic.

• Market Drivers
  - Low Interest Rates: The Reserve Bank of Australia (RBA) has maintained the cash rate at 4.25 % as of November, keeping borrowing costs attractive for homebuyers and investors.
  - Housing Supply Constraints: Cotality points out that zoning regulations, particularly in the Australian Capital Territory (ACT) and parts of New South Wales (NSW), limit new housing starts, tightening supply.
  - Investor Activity: A surge in foreign investment, especially from Asia, has reinforced demand for high‑end properties in metropolitan areas.

2. Affordability Crisis: Numbers That Shock

Affordability—the ratio of median house price to median household income—has deteriorated sharply. The latest figures from the Australian Housing and Urban Research Institute (AHURI), cited by Cotality, indicate:

• Median Affordability Ratio: 14.3, meaning a median‑income household would require over 14 years of earnings to purchase a median‑priced house without considering debt servicing.
• Comparative Benchmarks: The affordability ratio is 2.5 times higher than the OECD average for comparable economies, underscoring the severity of the issue.

Cotality’s commentary frames the affordability decline as “record” due to the convergence of rising prices, stagnant wage growth, and the lingering effects of the COVID‑19 pandemic on household debt. The firm stresses that this trend has implications for social equity and the broader economy, as a large segment of the population remains priced out of the market.

3. Policy Implications and Recommendations

The article discusses the RBA’s stance and calls for coordinated policy responses:

• Monetary Policy: While the RBA has kept rates low to support growth, Cotality warns that further hikes could dampen demand too sharply, possibly leading to a price correction that would harm homeowners who have recently purchased on margin.
• Supply‑Side Interventions: Local councils and state governments are urged to relax zoning restrictions and streamline approvals for medium‑density housing to increase the supply of affordable units.
• Targeted Subsidies: The government is advised to consider first‑home buyer grants and tax incentives for investors who purchase in outer‑regional areas to distribute demand more evenly.

A link to the RBA’s press release (https://www.rba.gov.au/media-releases/2025/2025-11-30.html) offers further detail on the central bank’s policy outlook, while a recent study by the Australian Housing Council (https://www.ahc.org.au/publications/2025/affordability-report) delves into the long‑term affordability projections.

4. Comparative Context

In the broader international context, Australia’s property market remains robust relative to other OECD countries. The article references a recent OECD housing report (https://www.oecd.org/households-housing/2025/household-affordability/) that underscores how Australia’s high affordability ratio is an outlier among peer nations.

Within Australia, the affordability crisis is most pronounced in Sydney and Melbourne, where median house prices surpass the median household income by a wide margin. Conversely, regional hubs like Adelaide and Newcastle show more favorable ratios, largely due to lower price growth and steadier wage increases.

5. Conclusion

The November uptick in house prices underscores persistent demand in a market still buoyed by low interest rates and constrained supply. However, the stark decline in affordability—highlighted by Cotality—raises alarms about the sustainability of this growth trajectory. For policymakers, the challenge lies in balancing the need to maintain economic momentum with the imperative to ensure that housing remains accessible to a broader swath of Australians.

The article concludes with a call for a multi‑faceted approach: tightening supply restrictions in the short term, coupled with strategic monetary policy adjustments and targeted support for first‑home buyers and regional developers. Only through a coordinated effort can the nation stave off a potential housing bubble and safeguard the long‑term well‑being of its citizens.

Key Takeaways
- Median house price increased 1.2 % in November, reaching A$1,112,000.
- Affordability ratio has hit a record 14.3, a 2.5‑fold increase over OECD averages.
- Supply constraints and low borrowing costs are primary drivers of price growth.
- Policy recommendations emphasize zoning reform, targeted subsidies, and careful monetary oversight.