Will Property Prices Rise in 2025?
As we move into 2025, many people are wondering if property prices will keep rising in Australia. Inspite of the ongoing pressures of cost-of-living and mortgage repayments, homeowners have still seen some good news—property prices have continued to grow.
In October, data from CoreLogic showed property values increased by 0.3% nationally. It was the 21st consecutive month of price growth across the country. A Reuters poll forecasts a 3.7% rise in 2025. Similarly, the Australian Financial Review anticipates a 3% increase, attributing this to potential interest rate cuts rejuvenating a cooling market.
Recently, Australia’s property market also reached a new milestone. For the first time ever, the total value of residential real estate climbed to $11 trillion, according to CoreLogic. Property values in Sydney, Brisbane, Adelaide and Perth are all currently at a record high.
But will this trend hold in 2025? Let’s take a closer look at the factors influencing the market.
National Outlook
Recent reports suggest a modest national rise in property prices. A Reuters poll predicts a 3.7% increase in 2025. Similarly Australian Financial Review expects a 3% rise. This is partly due to potential interest rate cuts helping to revive the market. CoreLogic also found that 65% of real estate agents expect price growth, driven by improving affordability and rising incomes.
What Will Influence House Prices in 2025?
There are several key factors that will determine whether property prices will continue to rise or start to level off.
✅ Supply vs. Demand
One of the main drivers of property prices is the balance between available properties and buyer demand. When more properties are listed, buyers have more choice and there may be less urgency to purchase. There may also be more room for price negotiations, so prices can drop. On the other hand, when there are fewer properties available to purchase, stronger competition amongst buyers can cause prices to rise.
In Perth, Adelaid, Brisbane the listing of property for sale is 20% less than average over the past 5 years. As a result conditions are favourable for sellers.
✅ Interest Rates and Borrowing Power
Reserve bank of Australia had kept cash rate on hold since Nov2023 but the rate cut in Feb2025 can change things. Lower interest rates gives buyers more borrowing power. Historically, when this has happened borrowers tend to spend to their maximum budget. This in turn can drive up property prices. If the RBA does ease rates, we may see the market pick up again.
✅ Buyer Confidence and Economic Conditions
Market sentiment plays a big role in the property market. If buyers remain cautious due to economic uncertainty, property prices may rise more slowly. However, if interest rate cuts and a stabilising economy boosts confidence, more people may start buying. This will drive prices up.
Regional Variations
Australia’s property markets are not all moving in the same direction. Here’s a look at how different regions might perform:
- Queensland: Queensland is expected to perform well, with 70% of real estate agents predicting price growth. This is due to strong migration trends and high demand.
- Sydney and Melbourne: Sydney’s property market has seen declines, with forecasts suggesting a potential 15% drop in 2025. On the other hand, Melbourne’s market may recover, with agents predicting a rebound as affordability improves.
- Adelaide: Adelaide continues to see growth, with a 0.33% monthly increase and a significant 11.91% year-on-year rise in property prices.
What This Means for Homeowners
If your property’s value has increased, you may be sitting on untapped equity that you could be using to your advantage.
Maybe you want to buy an investment property in 2025? Or perhaps you’d like to drive up your property’s value even further with some home reno projects?
When you consider that some homeowners have seen their property’s value quintuple within the timeframe of a typical 30-year mortgage, it’s worth finding out how much equity you have. Get in touch for an estimate
The Bottom Line
Property prices are expected to keep rising in 2025, but at a slower pace compared to previous years. The property market will continue to be shaped by regional trends, interest rates, supply-demand factors, and economic conditions.
If you’re considering buying, refinancing, upgrading, or leveraging your home’s equity, preparing early can help you make the most of market opportunities. Get in touch with us today to discuss your home loan and property investment options for 2025.
Disclaimer: This blog offers general information on mortgages and finance for informational purposes only. It is not a substitute for personalized advice from a qualified mortgage professional or financial advisor. Use your discretion and seek professional guidance based on your individual circumstances.
