Australian Real Estate Market Outlook: Price Projections for 2024 and 2025

Property rates throughout most of the nation will continue to increase in the next financial year, led by considerable gains in Perth, Adelaide, Brisbane and Sydney, a brand-new Domain report has anticipated.

Home prices in the significant cities are expected to increase between 4 and 7 percent, with unit to increase by 3 to 5 percent.

By the end of the 2025 fiscal year, the average home cost will have surpassed $1.7 million in Sydney and $800,000 in Perth, according to the Domain Projection Report. Adelaide and Brisbane will be on the cusp of breaking the $1 million typical house price, if they have not already strike seven figures.

The Gold Coast real estate market will also skyrocket to new records, with rates expected to increase by 3 to 6 percent, while the Sunshine Coast is set for a 2 to 5 percent increase.
Domain chief of economics and research study Dr Nicola Powell said the projection rate of growth was modest in most cities compared to cost movements in a "strong increase".
" Prices are still increasing but not as quick 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."

Homes are also set to end up being more expensive in the coming 12 months, with systems in Sydney, Brisbane, Adelaide, Perth, the Gold Coast and the Sunshine Coast to strike new record costs.

Regional systems are slated for a general rate increase of 3 to 5 percent, which "says a lot about cost in terms of purchasers being guided towards more budget-friendly property types", Powell stated.
Melbourne's home market remains an outlier, with anticipated moderate annual growth of approximately 2 per cent for homes. This will leave the median home price at between $1.03 million and $1.05 million, marking the slowest and most irregular recovery in the city's history.

The 2022-2023 downturn in Melbourne spanned 5 consecutive quarters, with the mean home price falling 6.3 percent or $69,209. Even with the upper projection of 2 per cent development, Melbourne house costs will just be just under halfway into healing, Powell said.
Canberra house rates are also expected to stay in recovery, although the forecast development is moderate at 0 to 4 per cent.

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

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

"It indicates various things for different types of purchasers," Powell stated. "If you're a current property owner, rates are expected to rise so there is that aspect that the longer you leave it, the more equity you may have. Whereas if you're a first-home buyer, it might indicate you need to save more."

Australia's housing market stays under substantial strain as households continue to come to grips with price and serviceability limits amid the cost-of-living crisis, increased by continual high rate of interest.

The Reserve Bank of Australia has kept the official cash rate at a decade-high of 4.35 percent given that late last year.

The shortage of new real estate supply will continue to be the primary motorist of property prices in the short term, the Domain report stated. For several years, real estate supply has been constrained by scarcity of land, weak building approvals and high building expenses.

In rather favorable news for prospective purchasers, the stage 3 tax cuts will deliver more money to households, lifting borrowing capacity and, therefore, purchasing power throughout the nation.

Powell said this could further reinforce Australia's housing market, but may be offset by a decrease in real wages, as living expenses increase faster than incomes.

"If wage development remains at its existing level we will continue to see extended affordability and dampened demand," she said.

Throughout rural and suburbs of Australia, the worth of homes and apartments is anticipated to increase at a steady pace over the coming year, with the forecast differing from one state to another.

"At the same time, a swelling population, fueled by robust influxes of new residents, provides a significant boost to the upward trend in property values," Powell stated.

The revamp of the migration system might activate a decrease in regional home need, as the brand-new proficient visa path gets rid of the need for migrants to reside in regional areas for two to three years upon arrival. As a result, an even bigger portion of migrants are most likely to converge on cities in pursuit of remarkable job opportunity, consequently decreasing demand in regional markets, according to Powell.

According to her, removed regions adjacent to urban centers would maintain their appeal for individuals who can no longer afford to live in the city, and would likely experience a surge in appeal as a result.