Residz Team 2 min read
According to a wide review of recent forecasts, Australian house prices are expected to continue rising in 2025, with national home values projected to increase by 2% to 5%. Capital cities may see slightly higher growth rates of 3% to 6%, with Perth leading the pack at a predicted 8% to 11% increase.
Moderate growth is anticipated for the Australian housing market in 2025, with national home prices expected to rise by 2% to 5%. This forecast represents a slight increase from earlier predictions, reflecting stronger-than-expected market performance in early 2024 despite high interest rates and reduced borrowing capacities. Capital cities are projected to outpace the national average, with price increases ranging from 3% to 6%. These projections suggest a continuation of the market's resilience, albeit at a slower pace compared to the significant gains observed during the pandemic years.
Perth is expected to lead the nation in property price growth, with forecasts ranging from 8% to 11% for the 2024-25 financial year. Adelaide follows closely behind with projected increases of 5% to 8%, while Sydney, Melbourne, and Brisbane are anticipated to see more moderate growth of 3% to 6%. The smaller capitals show varied predictions, with Canberra expected to grow by 2% to 5%, Darwin by 1% to 4%, and Hobart trailing with 0% to 3% growth. These city-specific forecasts highlight the diverse nature of Australia's property markets, with some areas poised for significant gains while others may experience more subdued growth.
Several key factors are expected to influence the Australian housing market in 2025. Persistently high interest rates may continue to limit finance availability and affordability, while constrained housing supply is likely to drive price growth. The introduction of tax cuts in the new financial year could boost borrowing capacities and potentially inflate housing prices. Additionally, weak new dwelling commencements and completions may increase demand for established properties, while a tight rental market could encourage more people to buy. These factors, combined with ongoing population growth and limited housing supply, are expected to contribute to the moderate price increases forecast for 2025.
Regional variations in the Australian property market are expected to be significant in 2025. Mid-tier capital cities like Perth, Brisbane, and Adelaide have shown stronger recent price growth compared to larger markets. Some areas may see superior apartment price gains relative to houses, as affordability challenges drive buyers towards more compact living options. The Gold Coast and Sunshine Coast in Queensland are anticipated to experience continued growth, with house prices expected to rise by 3% to 6% and 2% to 5% respectively. These regional differences highlight the importance of considering local market conditions when assessing property investment opportunities across Australia.