Bluestone and Cotality unpack what's driving prices, restricting stock, and how to deliver client value in a hotly contested market.
Nothing captures the national attention quite like the housing market. Bluestone Home Loans recently spoke with Cotality’s head of research, Tim Lawless to discuss what’s driving the housing market. They dive deep into the macroeconomic trends, seller sentiment and understand the regional opportunities at play.
Here are the key takeaways to help keep ahead of the curve.
1. Housing values are rising steadily, with mid-sized capitals leading the way.
Since the February rate cuts, home values have been trending higher across the country.
According to Lawless, this uplift is being driven by lower interest rates, tight stock, and a lift in buyer confidence. The (quite literal) hot capitals of Darwin (5.9%), Perth (4%) and Brisbane (3.5%) are leading the country in recent quarterly growth figures. This pace softens as we move down south, with Melbourne (1%) and Hobart (0.1%) showing renewed signs of growth, albeit at a slower pace.
However, stretched affordability may slow down how fast prices rise.
Broker takeaway: Growth is centered outside the major markets of Sydney and Melbourne. As investors take up an increasingly large share of new loans (37%) they may seek growth potential outside of the major centres. Hotspots now exist outside of the capitals, with regional centres like Toowoomba leading the pace in growth.
2. It’s a sellers’ market
While more homes are hitting the market this spring, it’s starting from a low base. The number of home sales is slightly higher than this time last year (+2.7%) and now sits 4.2% above the five-year average. This is creating strong demand, however constrained supply could fuel further price growth. Advertised supply is down almost 15% YoY and 19% below the five-year average.
Constrained supply and price growth starts to make sense when we look at interstate migration, with Queenlsand leading the way with 4,238 new residents, followed by Western Australia with 2,687 new residents during the past quarter. This starts to provide additional context to the quick sales cycles, constrained stock and subsequent price growth.
Broker takeaway: With limited stock and strong demand, buyers need to be ready to act fast and understand the growth potential across the country. Borrowers may have vastly different purchasing power as they consider opportunities across the country.
3. Spotlight on South East Queensland (SEQ)
SEQ has seen strong price growth over the past five years, with some renewed momentum building in recent months. Unit values are rising faster than houses, driven by low supply and increased investor interest. While demand remains strong, construction hasn’t kept pace, adding pressure to affordability. Migration trends are settling but still above average, and overseas migration has normalised. Big infrastructure projects are also reshaping how and where people live across the region.
Broker takeaway: SEQ presents layered opportunities, but affordability and supply challenges could see units and new development areas provide long-term growth opportunities.
4. Outlook: what’s ahead?
While the market is showing signs of strength, housing is becoming more unaffordable for many. Inflation is sitting near the RBA’s target, and the labour market—especially in Queensland—remains tight, even as it gradually eases. Economic conditions are improving, with GDP growth expected to lift by the end of the year, and there’s potential for further rate cuts, which could boost consumer confidence.
However, affordability and serviceability remain key hurdles, especially with predicted rate cuts on the horizon. Housing supply is still falling short and will likely keep upward pressure on prices and rents. Regulators will be likely be watching closely for signs of rising household and housing debt, particularly among investors. Meanwhile, first home buyers could become more active as new incentives roll out which would put upward pressure on units and entry-level houses.
Broker Takeaway: Manage client expectations. They’ll need support navigating affordability and limited supply. These supply shortages will start to see buyers seeking quick solutions and fast turn-around times. It’s the perfect opportunity to form close relationships with your clients and their finance network, as they look to move quickly to capitalise on market opportunities. Partner with a lender that prioritises broker support, education and turn-around times to ensure you have the support need to keep your clients ahead.
Source: Cotality Research 2025
The information provided in this article is general in nature and is not intended to be financial advice. It does not take into account your requirements, objectives or financial situation. Bluestone Home Loans are serviced by Bluestone Servicing Pty Ltd (ACL 390183) for Permanent Custodians Ltd (ACN 001 426 384). All loans are subject to suitability and credit assessment. Fees, terms, conditions, and lending criteria apply.
