SPRING’S SURGE: MOMENTUM OR MIRAGE

Spring has arrived, and with it, the market has gathered pace. Cotality’s latest Home Value Index recorded a 0.8% rise in September, the strongest monthly gain since October 2023. Over the quarter, national values climbed 2.2%, with capital cities leading the lift.

It is the kind of headline that fuels urgency. Markets heating up. Act now. But beneath the surface, the question is not just how fast prices are rising. It is what is driving this momentum, and whether it is sustainable.

What is driving the lift?

1. Supply is vanishing

One of the clearest signals in Cotality’s data is that listings are at record lows. In Brisbane, advertised stock is sitting about 31 percent below the long-term average, while Darwin is down 53 percent.

This matters. When more buyers are active and there are fewer homes available, competition intensifies. That imbalance is a powerful engine for price growth, particularly in markets that were already understocked.

2. Demand remains strong

Buyer activity has not tapered. Relative to previous years, sales volumes are tracking above average. Auction clearance rates are sitting at around 70 percent, up from the low 60s earlier in the year. Buyers are engaged, and the market is responding.

3. Lower and middle price segments are leading

The strongest growth is occurring in the lower and mid tiers of the market, not the top end. Nationally, lower quartile values rose approximately 2.6 percent over the quarter, the mid market grew around 2.7 percent, and the upper quartile lifted by about 1.8 percent.

In Brisbane, units are outperforming houses. This points to the tightest pressure being felt in more affordable and accessible segments.

What to watch: caveats and reality checks

Ethel + Florence has always believed in clear eyes, not sugar coating. A few pressure points could temper this rally.

Rising costs and stretched affordability

When supply is constrained, competition drives prices upward. But many buyers are already stretched. There is a limit to how far purchasing power can stretch before demand starts to thin out.

Interest rates and borrowing power

Market momentum can be fragile if interest rates or credit conditions shift. If lending tightens, higher price points may be the first to soften.

Variation across location, stock and quality

Headline indexes smooth over a complex market. A three bedroom home on the fringe will behave differently to a premium apartment in the city. The supply shortage is not evenly distributed, and performance will diverge accordingly.

Momentum versus structural growth

Seasonal bursts often reflect existing imbalances rather than a new wave of demand. The critical question is how much of this rise is the result of temporary forces rather than deeper structural trends.

What this means for owners, buyers and sellers

For sellers, the wind is currently at your back, particularly if your property sits within a segment where supply is tight. The temptation to overprice is real, but buyers are discerning, and value still matters.

For buyers, selectivity is key. The competition will feel intense, and the risk of rushing is high. Focus on fundamentals like location, quality and long-term growth rather than headline momentum.

For those holding, watching or planning ahead, this is a moment to stay alert. Not to panic, but to pay attention to the signals beneath the surface.

Our call

Yes, there is momentum. Yes, supply is tight. Yes, some segments, particularly units and the lower to mid market, are leading this sprint.

But this is not a guarantee that prices will continue to accelerate. It is a reminder that data matters. The imbalance between supply and demand is real, but markets are dynamic, and fundamentals will eventually set the pace.

We will continue to watch this closely in the months ahead, tracking how borrowing capacity, supply and buyer sentiment evolve as spring turns to summer.