Australian home prices rose by 1 per cent in November, reaching a national median value of A$888,941 (£581,990), according to data released by property consultant Cotality (formerly CoreLogic).

This followed a 1.1 per cent gain in October and reflects broad-based price growth across major state capitals.

Prices in Perth surged 2.4 per cent during the month, while Sydney and Melbourne saw more modest increases of 0.5 per cent and 0.3 per cent respectively.

Cotality’s research director noted that price growth was strongest in mid-sized capitals, “especially evident in Perth, where listings are holding more than 40 per cent below average, buyer demand is elevated.” Homes across much of the country continue to sell rapidly, but the rapid rise in values has deepened the country’s housing affordability woes.

The national ratio of dwelling value to household income has reached its highest level on record, underscoring the growing gap between earnings and housing costs.

Housing income stress is also rising.

For many households — especially first-time buyers — the steep values translate into stretched borrowing conditions as banks tighten serviceability tests.

Cotality warns that “fewer borrowers will be able to access credit” under these conditions.

The steep rental increases of recent years have meanwhile pushed housing costs beyond what many households can reasonably afford.

The price surge adds pressure on the government of Anthony Albanese, whose centre-left administration has pledged to build 1.2 million new homes by 2030 to ease supply constraints and bring down costs.

Nevertheless, analysts expect prices to continue rising: a recent poll of property analysts projected about 7 per cent national price growth in 2026, driven by tight supply and persistent demand.

The tension between ongoing price growth and deteriorating affordability highlights the deep structural challenges in Australia’s housing market — a dynamic that threatens to price many would-be homeowners out of the market altogether.