2024 and 2025 Housing Market Predictions: Australia's Future Home Prices

A recent report by Domain predicts that real estate rates in numerous regions of the country, especially in Perth, Adelaide, Brisbane, and Sydney, are anticipated to see considerable increases in the upcoming financial

Throughout the combined capitals, home prices are tipped to increase by 4 to 7 per cent, while system costs are anticipated to grow by 3 to 5 percent.

According to the Domain Projection Report, by the close of the 2025 , the midpoint of Sydney's housing rates is expected to exceed $1.7 million, while Perth's will reach $800,000. On the other hand, Adelaide and Brisbane are poised to breach the $1 million mark, and might have already done so already.

The Gold Coast real estate market will also soar to brand-new records, with costs expected to increase by 3 to 6 per cent, while the Sunshine Coast is set for a 2 to 5 percent increase.
Domain chief of economics and research Dr Nicola Powell stated the forecast rate of growth was modest in the majority of cities compared to cost movements in a "strong increase".
" Costs are still rising however not as fast as what we saw in the past financial year," she stated.

Perth and Adelaide are the exceptions. "Adelaide has been like a steam train-- you can't stop it," she stated. "And Perth just hasn't decreased."

Rental costs for apartments are anticipated to increase in the next year, reaching all-time highs in Sydney, Brisbane, Adelaide, Perth, the Gold Coast, and the Sunshine Coast.

According to Powell, there will be a basic price increase of 3 to 5 per cent in local units, showing a shift towards more affordable property alternatives for buyers.
Melbourne's home market remains an outlier, with anticipated moderate annual development of as much as 2 percent for houses. This will leave the median home price at in between $1.03 million and $1.05 million, marking the slowest and most inconsistent healing in the city's history.

The 2022-2023 recession in Melbourne covered five successive quarters, with the average home price falling 6.3 percent or $69,209. Even with the upper forecast of 2 percent growth, Melbourne home prices will just be just under halfway into healing, Powell said.
Canberra house costs are also expected to stay in recovery, although the projection growth is moderate at 0 to 4 per cent.

"The country's capital has had a hard time to move into an established healing and will follow a likewise slow trajectory," Powell stated.

The forecast of upcoming price hikes spells problem for prospective property buyers having a hard time to scrape together a down payment.

"It suggests different things for various kinds of buyers," Powell stated. "If you're a current property owner, rates are expected to increase so there is that element that the longer you leave it, the more equity you might have. Whereas if you're a first-home purchaser, it might imply you need to save more."

Australia's housing market stays under significant stress as families continue to grapple with cost and serviceability limitations amid the cost-of-living crisis, increased by continual high interest rates.

The Reserve Bank of Australia has kept the main money rate at a decade-high of 4.35 per cent because late in 2015.

The lack of brand-new real estate supply will continue to be the main chauffeur of residential or commercial property rates in the short term, the Domain report said. For many years, real estate supply has been constrained by shortage of land, weak structure approvals and high building and construction costs.

In somewhat favorable news for potential purchasers, the stage 3 tax cuts will deliver more money to homes, raising borrowing capacity and, for that reason, buying power across the country.

Powell said this could even more strengthen Australia's real estate market, but may be offset by a decrease in real wages, as living expenses increase faster than incomes.

"If wage growth stays at its present level we will continue to see stretched cost and moistened need," she stated.

Across rural and outlying areas of Australia, the value of homes and houses is expected to increase at a consistent rate over the coming year, with the projection varying from one state to another.

"At the same time, a growing population propped up by strong migration continues to be the wind in the sail of property price growth," Powell said.

The current overhaul of the migration system could lead to a drop in demand for regional real estate, with the introduction of a new stream of competent visas to eliminate the reward for migrants to reside in a local location for 2 to 3 years on going into the nation.
This will indicate that "an even higher percentage of migrants will flock to cities searching for much better task potential customers, hence moistening need in the local sectors", Powell stated.

However regional areas close to cities would stay appealing areas for those who have actually been evaluated of the city and would continue to see an increase of need, she included.