Australia’s housing market has surged in the immediate aftermath of Labor’s emphatic election victory, preliminary data shows, while analysts say an anticipated string of rate cuts may see the trend continue.
Auction clearance rates rose to 70% in the week following the election, according to preliminary Cotality data, from 60% in the middle of last month. An auction clearance rate of 70% or above typically indicates sellers are in control of the market.
Nerida Conisbee, the chief economist at real estate agency Ray White, attributed some of the buying enthusiasm to Labor’s win.
“There’s a higher level of certainty,” she said. “It was a landslide election, so people are feeling pretty confident that the right outcome has happened.”
Home prices are expected to rise faster than wages through the rest of 2025 on the back of expected interest rate cuts, analysts predict, while some forecast the returned government and its buyer help schemes could keep property prices rising in 2026.
The number of homes listed for sale remains relatively low, up to 33,000 on Monday from about 32,000 during April, according to Cotality’s head of research, Eliza Owen.
“People are still waiting to see the outcome of the interest rate decision in May,” Owen said.
The Reserve Bank board is heavily tipped to cut its key interest rate on 20 May, with markets predicting a further three reductions by November.
The bank’s rate cut in February, the first since 2020, has led to home values rising by a steady 0.6% in Sydney and Melbourne on Cotality’s measure, counteracting falling prices recorded at the end of 2024.
Economists expect nationwide values to rise by at least 3% but potentially as much as 10% over 2025, helped by rate cuts and a regular springtime sales surge.
Those forecasts could be constrained by a slower-than-expected recovery in buyers’ budgets after household spending data surprised forecasters last week by falling in March after rising five months in a row.
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But the government is expected to underwrite further price growth from January, when it expands its program enabling Australians to buy their first home with a deposit of just 5%.
Anticipated robust increases in home values, outpacing wages, threaten to widen the gap between property owners and younger renters struggling to get into the market.
Both Labor and the Coalition were criticised during the election campaign for promising policies that would drive up prices and for suggesting affordability could be resolved by prices growing “sustainably”, described by independent economist Saul Eslake as a “con”.
Lower house prices would be economically feasible but politically difficult for a government promising to underwrite rising home prices, Owen said.
“People do buy housing in the mindset that they’re going to make money off it … and policy that works to bring housing values down [means] changing that social contract.”
