The increase resulted from a combination of higher values, with the median home value in Australia reaching $732,886 at the end of the month, and the stock of housing increasing to around 11 million properties.

The national recovery in home values began in March this year, with values rising 4.9% through to the end of August. This recovery has wiped out around half of the preceding downturn between April 2022 and February 2023, when national home values fell -9.1% peak to trough. Home values are now just -4.6% from the peak in April 2022.

The recovery trend in values comes despite a cost of living crisis, low consumer sentiment levels and four increases in the cash rate so far this year amid the fastest rate hiking cycle on record. It begs the question, how is this possible?

There are a few factors that may explain why housing values have continued to rise, despite seemingly unfavourable growth conditions.