September 2025
Cameron Kusher
Thanks for reading my new monthly column published by the REIV.
This column is designed to give you the inside information on what the latest data shows and what you need to know for your discussions with buyers and vendors.
Here are the top five things to talk with your vendors about:
The Home Guarantee Scheme
The Home Guarantee Scheme is a government scheme which is changing from October 1. Any first home buyer will be able to purchase a property with as little as a 5% deposit which will see them avoid paying lenders mortgage insurance (LMI).
There will be no limits on the number of spaces available and there are no income caps but there are property price caps. In Victoria these caps are $950,000 in Melbourne and Geelong and $650,000 elsewhere.
If you have a vendor that has a home in this price point, it may be worthwhile holding back listing until around October 1 in order to capture maximum demand.
Housing supply
According to SQM Research, there were 18,178 new listings in August 2025 in Melbourne which was 27.5% higher over the month but 1.3% lower than a year ago.
Melbourne also saw 41,729 total properties for sale which was much higher than the volume in all other capital cities however, it was 4.8% fewer than a year ago.
Some areas of the city (and state) continue to see elevated overall stock levels and vendors unwilling to meet market expectations.
New listings will rise through spring, but it is imperative that if you are serious about selling a property that you listen to the market feedback and set realistic price expectations from the outset.
Housing prices
The REIV Melbourne median house price was $920,000 in August 2025 and it was unchanged from a year ago, as was the median unit price which was recorded at $630,000.
Regional Victoria has seen median house prices increase 0.8% over the year to $610,000 while unit prices in regional Victoria are 1.2% higher over the year reaching $422,500.
Most markets across the country, particularly the major capital cities, have seen prices rise at a much faster pace than those in Victoria. As a result, this is making Victorian housing prices look relatively more affordable and expected to drive an increase in interest, especially from interstate markets.
Sales volumes
Sales volumes saw a strong increase in August 2025 relative to July. In fact, sales volumes in August 2025 were 0.4% higher than they were over the previous August.
With housing looking affordable, a spring market and interest rates falling, the expectation is that sales volumes will lift quite substantially over the coming months.
Auction clearance rates
Auction clearance rates have trended higher over the past year. In fact, since the most recent interest rate cut in August we’ve seen an increased willingness to take properties to auction and at the same time weekly auction clearance rates have trended higher.
Here are the top five things to talk with your buyers about.
Home Guarantee Scheme
The Home Guarantee Scheme is a government scheme which is changing from October 1. Any first home buyer will be able to purchase a property with as little as a 5% deposit which will see them avoid paying lenders mortgage insurance (LMI).
There will be no limits on the number of spaces available and there are no income caps but there are property price caps. In Victoria these caps are $950,000 in Melbourne and Geelong and $650,000 elsewhere.
The Home Guarantee Scheme is likely to lead to an increase in demand for housing, particularly at lower price points, and push prices higher once it comes into effect. There should be an advantage for buyers willing to purchase sooner rather than later.
Lower interest rates and their impact on the market
Whenever interest rates are reduced by 25 basis points, the amount someone can borrow increases by around 2.5%. Historically, we’ve seen that reductions in interest rates lead to increased demand for housing and higher prices. There is an expectation of at least one further 25 basis point cut in interest rates later this year so that will see demand for housing increase further.
Like the Home Guarantee Scheme, there is an advantage to be had by those buyers that purchase sooner rather than wait until later when there is likely to be more competition.
Well-presented properties that are appropriately priced are selling quicker
Despite the fact price growth has been minimal over the past year, the median days on market for properties for sale is trending lower.
Well presented properties with a realistic price expectation are selling quite quickly. Median Days on Market (August) for Metro Melbourne was 35 days, 3 days faster than the previous month and 8 days faster than last August.
I expect through spring we will see days on market trend even lower as more buyers come out of the woodwork and competition to secure the best housing stock available intensifies.
Price growth has been moderate, more competition should lift prices
Over the past year median sale prices are unchanged in Melbourne and they have only increased marginally in regional Victoria. Lower interest rates and a refresh of stock coming to market during spring is likely to increase demand for homes.
Furthermore, the lack of price growth over recent years has made Victorian housing relatively more affordable. This fact is attracting the attention of interstate buyers who are now starting to target Victoria.
These are the type of conditions that lead to higher housing prices so acting sooner rather than later in this market can be advantageous in securing the property both sooner and at a more reasonable price point.
The economy is strengthening which means we’ll probably get fewer interest rate cuts
Recent economic growth data has shown that both economic growth and household spending has grown at a faster rate than recent forecasts from the Reserve Bank were anticipating.
While I still expect there will be at least one more 25 basis point cut to interest rates, we’re unlikely to get much more relief to interest rates than that.
If you are waiting for a further significant reduction in interest rates before making your next move, you may miss your chance.
We’ve already seen rates fall, price growth has been benign in Victoria for several years and more first home buyer stimulus is imminent.
If you are waiting to buy, banking on more interest rate relief, you are likely to miss your best purchase opportunities and could end up paying more for a property than you need to.
About Cameron Kusher
Over the last 20 years Cameron has worked as a property researcher for major businesses such as PRDnationwide, CoreLogic (now Cotality) and REA Group.
Cameron spent 12 years at CoreLogic as the Head of Research for Australia and 5.5 years at REA Group as the Director of Economic Research. Over the past 17 years he has become a well-regarded thought-leader on the residential property market and delivered thousands of presentations to the industry, customers and consumers.
He is passionate about taking complex economic and property insights and making them easy for anyone to understand, free of the jargon that most economic and property presentations tend to contain.