Housing Market Insights: Anticipating Australia's Home Prices for 2024 and 2025

A current report by Domain anticipates that realty costs in different regions of the country, particularly in Perth, Adelaide, Brisbane, and Sydney, are expected to see significant increases in the upcoming financial

Across the combined capitals, house costs are tipped to increase by 4 to 7 per cent, while unit prices are anticipated to grow by 3 to 5 per cent.

According to the Domain Forecast Report, by the close of the 2025 fiscal year, the midpoint of Sydney's housing prices is expected to exceed $1.7 million, while Perth's will reach $800,000. Meanwhile, Adelaide and Brisbane are poised to breach the $1 million mark, and may have currently done so already.

The real estate market in the Gold Coast is expected to reach new highs, with prices predicted to increase by 3 to 6 percent, while the Sunshine Coast is prepared for to see an increase of 2 to 5 percent. Dr. Nicola Powell, the primary economic expert at Domain, noted that the expected development rates are reasonably moderate in the majority of cities compared to previous strong upward patterns. She discussed that prices are still increasing, albeit at a slower than in the previous financial. The cities of Perth and Adelaide are exceptions to this pattern, with Adelaide halted, and Perth revealing no indications of decreasing.

Houses are also set to become more expensive in the coming 12 months, with systems in Sydney, Brisbane, Adelaide, Perth, the Gold Coast and the Sunlight Coast to hit new record prices.

Regional units are slated for an overall price boost of 3 to 5 percent, which "says a lot about affordability in regards to purchasers being guided towards more budget-friendly residential or commercial property types", Powell said.
Melbourne's realty sector stands apart from the rest, anticipating a modest annual boost of up to 2% for residential properties. As a result, the typical home price is predicted to support between $1.03 million and $1.05 million, making it the most slow and unforeseeable rebound the city has actually ever experienced.

The Melbourne housing market experienced an extended downturn from 2022 to 2023, with the average home cost visiting 6.3% - a significant $69,209 decline - over a duration of 5 consecutive quarters. According to Powell, even with a positive 2% development projection, the city's home costs will only manage to recover about half of their losses.
Canberra home costs are also anticipated to remain in healing, although the projection development is moderate at 0 to 4 per cent.

"The nation's capital has had a hard time to move into a recognized recovery and will follow a likewise slow trajectory," Powell stated.

With more rate rises on the horizon, the report is not encouraging news for those attempting to save for a deposit.

According to Powell, the implications differ depending on the kind of buyer. For existing house owners, delaying a choice may lead to increased equity as prices are predicted to climb. On the other hand, novice purchasers might require to set aside more funds. Meanwhile, Australia's real estate market is still struggling due to cost and repayment capability concerns, exacerbated by the continuous cost-of-living crisis and high rate of interest.

The Australian reserve bank has kept its benchmark rate of interest at a 10-year peak of 4.35% since the latter part of 2022.

The scarcity of new real estate supply will continue to be the main chauffeur of property costs in the short term, the Domain report stated. For several years, housing supply has actually been constrained by scarcity of land, weak structure approvals and high construction expenses.

In rather favorable news for prospective purchasers, the stage 3 tax cuts will provide more money to homes, raising borrowing capacity and, therefore, purchasing power throughout the country.

According to Powell, the real estate market in Australia might receive an additional increase, although this might be reversed by a decrease in the buying power of customers, as the cost of living boosts at a much faster rate than salaries. Powell cautioned that if wage development stays stagnant, it will lead to a continued battle for affordability and a subsequent decrease in demand.

In local Australia, home and system prices are expected to grow reasonably over the next 12 months, although the outlook varies between states.

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

The revamp of the migration system might activate a decline in regional property demand, as the new proficient visa path eliminates the need for migrants to live in local locations for 2 to 3 years upon arrival. As a result, an even larger percentage of migrants are likely to converge on cities in pursuit of exceptional job opportunity, consequently lowering need in regional markets, according to Powell.

According to her, removed areas adjacent to metropolitan centers would keep their appeal for people who can no longer manage to reside in the city, and would likely experience a rise in appeal as a result.