Australia’s property market is sizzling, driven by strong first home buyer demand and record investor activity. We explore what this summer has in store for brokers and their clients.
Summer typically brings a lull in property activity compared to the spring peak, as buyers turn their attention to the beach, the cricket, and making sure there’s enough prawns in the fridge for Christmas lunch. But this year, the market shows signs of staying hot.
The supply of affordable housing, or lack thereof, remains the dominant theme.
Since March 2020, the median dwelling price has jumped 47.3 per cent to $872,500, according to Cotality’s November 2025 Housing Affordability Report.
The median house now costs 8.9 times the average income, up from 6.6 times five years ago.
Part of the issue is that supply-side pressures remain acute, as noted by Cotality.
Over the past five years, the need for about 1 million new households was created, yet only 880,000 new homes were completed, underscoring a persistent housing shortfall.
Commenting on the analysis, Cotality head of research, Eliza Owen, said a combination of pandemic and post-pandemic factors had eroded affordability.
“This surge was fuelled by pandemic-era monetary stimulus and record-low interest rates that supercharged borrowing capacity and demand, even as housing supply lagged well behind household formation,” she said.
“Supply-side limitations have also compounded these demand pressures with construction sector insolvencies, rising material costs, and planning bottlenecks restricted new housing delivery.
“In short, the past five years combined extraordinary demand drivers with supply constraints, creating an extraordinary boom in both home values and rents.”
But the past year alone has seen housing demand surge. Three rate cuts from the Reserve Bank of Australia (RBA) in 2025 and the earlier-than-anticipated expansion of the government’s 5 per cent Deposit Scheme on 1 October have added further fuel to the fire, creating an intriguing scenario for first home buyers and investors.
While first home buyers are fighting hard to enter the market as soon as they can, investors – better positioned to weather rate changes – have also been flooding in, particularly as consensus grows that the RBA is unlikely to deliver further rate relief in the near term.
Together, these dynamics are turning up the heat in the property market, making it a season in which brokers will be key to helping clients secure the best outcomes.
This is an excerpt from an article that appeared in The Adviser’s December 2025/January 2026 issue. To read the full article, click here.
