The new year is set to bring dynamics to the property market
As 2025 approaches, the property investment landscape across Australia is capturing attention, with experts predicting a blend of continued growth, stability, and some localised price adjustments. Following a period of significant economic fluctuations and rising interest rates, 2025 is expected to bring new dynamics to the Australian property market. Here is a comprehensive look at the factors driving these predictions and what investors and homeowners alike can expect.
National trends: a shift to stability
Over recent years, Australia’s property prices have fluctuated in response to a range of economic factors, such as interest rate hikes, inflation, infrastructure investment, migration and demand. The latter part of 2024 has seen a steadying in property price growth, and many analysts predict that 2025 will continue this trend. While some markets will continue to see capital growth in the double-digit highs of previous years, it is projected there will be many major markets that will see more moderate growth.
The big four banks have largely aligned in their outlook for the coming year, suggesting that a cooling-off of interest rates will support the balanced growth. Different cities, states and markets across the country are anticipated to see variations in growth influenced by local supply and demand factors.
City-specific projections: key markets to watch
- Perth: This property market has been a standout performer in recent years, thanks to high rental yields and significant capital growth. These factors are expected to continue driving demand, particularly among investors. Many property experts predict that Perth could see an annual growth rate in 2025 that continues to out-pace some eastern capitals. High demand for resources and skilled labour in the region contributes to an optimistic forecast.
- Brisbane: This market has attracted significant interest due to population growth, infrastructure improvements, and relatively affordable prices compared to Sydney. The upcoming Olympic Games in 2032 is adding long-term value to Brisbane’s market appeal. Forecasts suggest continued double-digit growth between, making Brisbane a strong contender for investors looking for both capital growth and strong rental returns.
- Adelaide: This continues to capture attention as an affordable market with a strong rental yield. Though growth may moderate slightly in 2025 compared to recent years, analysts expect property prices to continue to see some of the strongest growth in the country. This growth is largely supported by a stable local economy, interstate migration, and investment in local infrastructure.
Regional areas: mixed growth potential
Regional Australia saw a significant boom in property demand during the COVID-19 pandemic, but as urban centres continue to recover, growth in some regional areas may taper. Nevertheless, areas with established infrastructure and lifestyle appeal, such as parts of Queensland’s Sunshine Coast and regional South Australia, may still experience steady demand and price growth.
Influential factors to consider in 2025
- Interest rates: These remain one of the most critical factors in property price forecasts. A reduction in rates by the Reserve Bank of Australia (RBA) could improve affordability and stimulate property purchasing in 2025.
- Government policies and incentives: Government incentives, particularly for first-time buyers and investors support market growth. If further policies aimed at addressing affordability or increasing housing supply are implemented, they may influence price growth in certain segments.
- Supply constraints: Australia continues to face supply constraints due to construction delays and high demand, particularly in major cities. Limited new housing stock, combined with robust demand, may place upward pressure on property prices in densely populated urban areas.
Investment considerations for 2025
With continued growth predicted, 2025 could be an opportune year for property investors seeking long-term gains in areas like Perth, Brisbane, and Adelaide, where rental yields and capital growth potential remain strong. The focus on cities with high growth drivers – such as infrastructure projects, population growth, and affordable entry points – can offer attractive opportunities.
Looking ahead
While growth projections vary by market, the general outlook for property in Australia in 2025 points toward a more stable, steady market environment. For investors, this period offers the chance to build resilient portfolios in areas with sustainable growth and superior rental returns. With the possibility of easing interest rates and continuing strong migration trends, 2025 presents a great time to begin, or continue to grow your wealth and financial security through strategic property investment.
Richard Sheppard is the CEO and founder of inSynergy Property Wealth Advisory. inSynergy provides a broad range of professional services designed to assist with all aspects of property investment. Phone 1300 425 595 or visit insynergy.net.au
