As we step into 2025, the Australian property market looks set to showcase a range of challenges and opportunities for buyers, sellers and investors. Factors like interest rates, migration trends and evolving rental conditions all contribute to shaping the year ahead. Here’s what to expect for residential real estate in 2025.
Belle Property’s insights reveal that the 2025 property market will be balancing several issues. High interest rates have dampened some buyer enthusiasm, while in other areas limited housing supply and continued migration are keeping demand strong. CoreLogic’s November 2024 data showed a 5.5% increase in home values nationwide, a trend likely to extend into 2025. The rental market remains competitive, driven by low vacancy rates and rising rents, while potential interest rate reductions later in the year could re-energise market activity.
The New South Wales metropolitan property market saw increased stock levels towards the end of 2024, largely driven by the impact of higher interest rates. This rise in supply has slowed market activity, putting downward pressure on prices and providing more choice for buyers. Despite this, demand for premium suburbs remains strong, fuelled by foreign investment and stable buyer confidence. If interest rates decrease in 2025, buyer confidence is expected to improve, potentially stabilising prices.
Regional New South Wales faces challenges as it transitions into 2025. Following a significant price surge during the COVID era, many areas are struggling to maintain momentum as businesses call more employees back to metropolitan offices. Lifestyle properties and holiday homes have been particularly impacted by rising costs and reduced disposable income, with this trend expected to persist through the first half of 2025.
2025 RENTAL MARKET TRENDS.
The 2025 rental market is poised for increased competition. As vacancy rates remain low, tenants may face rising rents, particularly in metropolitan areas. Investors are likely to find attractive opportunities in growth regions like Brisbane and Adelaide, where rental yields remain strong. In Western Australia, vacancy rates remain exceptionally low, driving rents higher — a trend likely to persist into 2025.
LOOKING AHEAD.
While challenges such as affordability pressures and policy changes remain, there are plenty of opportunities for informed buyers and investors for the year ahead. A potential reduction in interest rates in 2025 could revitalise the market further, making this a year of cautious optimism for residential real estate. Understanding these trends will be critical for navigating this dynamic property landscape.
For more insights into market trends, contact Belle property Dural’s Principal Carolyn Wheatley for a discussion today. 0407 120 483 [email protected]
