Ready for 2025? Dive into property market predictions shaping Australia's real estate. Discover top-performing regions, rate cut impacts, and the rise of regional hubs like the Sunshine Coast. Whether you're investing or buying your dream home, this blog is packed with expert insights to help you make smart moves in a dynamic market. Stay ahead with expert analysis and actionable strategies for success!
2025 is finally here, and if you're like most people, buying real estate is probably at the top of your list this year.
In this article, I want to share my insights on:
If you're curious about my take on all of this, keep reading!
Where could prices be headed in 2025?
Australia's dynamic property market is undergoing a significant transformation, with new data highlighting eight major real estate trends to monitor in 2025.
The recently released Property Outlook Report 2025 identifies key developments poised to shape both residential and commercial property sectors in the year ahead.
Here are the 7 must-know trends for Australian property in 2025.
Ray White Chief Economist, Nerida Conisbee, co-author of the Property Outlook Report 2025, noted that financial markets expect the Reserve Bank of Australia (RBA) to implement two interest rate cuts later this year. However, she cautioned that these predictions could change based on economic conditions and inflation trends.
“The key factor is inflation,” she said. “Although it’s back within the RBA’s target range, risks remain. A key uncertainty is the U.S. election—if Donald Trump wins, increased government spending and tariffs on Chinese goods could drive up global prices, including in Australia, complicating the RBA’s ability to cut rates.”
What's interesting is that we are already seeing rates being cut across the globe, and we can see that in many parts of the world, including:
Australia’s property market has been flat for about 13 months, and we won’t have our next RBA meeting until February. Interestingly, CBA initially predicted rate cuts for February 2025, while other banks expected them between May and September. Now, CBA is sticking with its February forecast, which carries weight due to its size, but predictions have largely been off lately. It’s likely the cuts will happen in Q2 or Q3 2025.
The issue is that many predicted rate cuts much earlier, including myself, and with no cuts yet, people are really feeling the pinch. The mortgage cliff hasn’t been as severe as expected, but many are still barely holding on. Despite this, demand is still outpacing supply, which means those struggling may still be able to sell at a profit.
That said, many are holding on, thinking rate cuts will drive prices up. However, recent data shows Sydney is dropping faster than anticipated, and while Melbourne is slowing down, it might bottom out and recover in 2025.
In a report published by Real Estate AU, it was revealed that:
It’s important to note that while inflation is the key focus for the RBA, it’s not the only factor at play. We’re already seeing slowdowns in both the private and retail sectors, and there's a per capita recession with many just barely holding on. However, unemployment hasn't peaked yet, and there's some debate about how it's being calculated—it's likely higher than reported. Similarly, the official inflation numbers may not fully reflect the reality either.
Ms. Nerida Conisbee pointed out that while Australia’s housing market shows signs of cooling in 2025, regional trends differ. Perth, Southeast Queensland, and Adelaide are performing well, while Sydney and Melbourne are slowing, heading towards flat conditions. Increased mortgage strain and higher property listings are putting downward pressure on prices in some areas.
However, strong population growth, high building costs, and expectations of rate cuts in 2025 should help prevent major price drops.
In my opinion, I don’t see house prices rising by 15%, 20%, or 25% like during the pandemic, nor do I expect significant volatility on the downside. Without rate cuts or a major economic collapse, prices aren’t likely to drop by 20% or 25%. We could see smaller corrections, around 5% or 7%, in certain markets. The affordable market will remain the key focus for many.
Ray White senior data analyst, Adam Go Tian expected shifts across Australia's premium property markets —the top 5% of the market in each region.
“The pecking order of Australia’s premium property markets is experiencing its most dramatic realignment in years,” he said.
“With traditional hierarchies being challenged and new players climbing to the fore,” Tian added.
Here’s the luxury home price growth over the last five years:
Other cities like Brisbane, Perth, Canberra, and Adelaide also saw around 50% growth, averaging 10% per year.
According to Mr. Tian, the property restructuring sees the creation of a "golden arc" stretching from the Gold Coast to Brisbane to the Sunshine Coast. This will reportedly emerge stronger in 2025, with all three having overtaken Melbourne in the last two years.
“The Gold Coast and Sunshine Coast have established themselves as Australia’s second and third most expensive housing markets, with remarkably similar geometric mean house prices of $1.18m and $1.14m respectively. Both regions have also witnessed an identical 76 per cent increase in prices over the past five years.”
“Brisbane, while still more affordable at a geometric mean house price of $996,000, is also showing signs of joining its coastal counterparts to complete the Golden Arc. The city has the second-highest five-year growth rate of 83.5 per cent, trailing only Adelaide.”
Mr. Tian has highlighted a notable increase in the "$1 million club" across regional Australia, which refers to areas with a median property price exceeding $1 million. This group has expanded significantly, growing from just two locations five years ago to 20 in 2024.
By 2025, four additional areas are expected to join the club, with seven more identified as strong contenders to reach seven-figure medians throughout the year.
“The Sunshine Coast Hinterland, currently at $972,787, is projected to reach $1.05m, supported by an impressive 8 per cent average annual growth over the past decade,” he said.
For the past four and a half years on YouTube, I’ve been advocating for regional areas, despite the old belief that only metro cities were worth investing in. The key now is knowing when and where to pivot your strategy.
Affordability has always been a concern, especially as property prices rise faster than wages. Smaller capital cities and regional hubs are becoming key areas to watch. For example, the Sunshine Coast has skyrocketed from $500K-$600K to over $900K, and possibly past $1M, outperforming places like Sydney, which has long been considered a “set and forget” market.
There are also emerging areas like the Gold Coast, Newcastle, and Lake Macquarie East (with 7% growth) where prices are hitting the million-dollar mark. It’s all about digging deeper into the data, particularly for houses (not just units), which are still considered blue-chip investments.
In a recent report, Ray White’s Vanessa Rader highlighted a structural shift in the office market, driven by changing tenant demands and growing ESG pressures. She noted that B-grade and lower-quality assets will struggle without significant investment.
Vacancies in secondary office spaces could rise to 22% (from 15.9%) over the next five years, while prime markets will thrive, with vacancies dropping from 13.7% to 5.4% by 2029, creating opportunities for new development.
For example, Parramatta in Sydney, once seen as the second CBD, now has vacancy rates near 50%, meaning half of office buildings are empty—putting pressure on cash flow for investors.
As for whether commercial office space is the best investment, I don't think so. Whether you’re investing in residential or commercial, don’t just buy based on hype—look at the actual data and trends driving the market.
Rader also expects a dynamic shift via private investors across commercial property this year, with “anticipated interest rate reductions expected to reignite transaction activity across all sectors.”
Now, SQM Research has also released Christopher's Housing Boom and Bust Report 2025.
Over the last six months, I’ve said Perth is likely to have strong momentum in the next 12 months, but with that comes downside risk. While I’m not predicting a decline, market fluctuations often lead to panic selling, driven by emotion rather than logic.
I still believe Perth will be a top market, but if you already own property there and are seeing equity growth, consider pulling some out and diversifying.
As for Sydney and Melbourne, the report predicts a 5% downturn. However, predictions are never certain. I’ve been right 80-90% of the time, but unforeseen events like geopolitical issues or rate cuts can change things quickly, possibly triggering a boom even bigger than the pandemic surge.
One thing is certain: markets will rise due to currency debasement—the dollar weakens, and asset prices go up.
We’re making informed guesses based on today’s data, but in a few months, geopolitical events or unexpected rate cuts could drastically change things—potentially leading to a property boom even bigger than the pandemic surge.
The reality is, we never truly know what will happen next year. That uncertainty is part of every market cycle.
Key things to remember:
I hope you guys have taken some insights from this blog,
I'll catch you guys in the next one.
Thanks, guys
Disclaimer: Search Property Pty Ltd (SP) does not provide financial or investment advice and does not hold a financial services license as defined in the Corporations Act 2001 (Cth). Any advice given by SP is general in nature and does not take into account your personal circumstances or objectives, financial situation or needs.
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