What to Expect: Australian Home Prices in 2024 and 2025

A recent report by Domain forecasts that realty rates in different regions of the nation, particularly in Perth, Adelaide, Brisbane, and Sydney, are anticipated to see significant boosts in the upcoming financial

Home costs in the significant cities are anticipated to rise between 4 and 7 percent, with system to increase by 3 to 5 percent.

By the end of the 2025 fiscal year, the average home price will have exceeded $1.7 million in Sydney and $800,000 in Perth, according to the Domain Forecast Report. Adelaide and Brisbane will be on the cusp of breaking the $1 million median house rate, if they haven't currently hit 7 figures.

The real estate market in the Gold Coast is expected to reach brand-new highs, with rates forecasted to increase by 3 to 6 percent, while the Sunlight Coast is anticipated to see an increase of 2 to 5 percent. Dr. Nicola Powell, the primary economic expert at Domain, kept in mind that the anticipated growth rates are fairly moderate in the majority of cities compared to previous strong upward trends. She discussed that rates 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 showing no signs of decreasing.

Rental costs for homes are expected 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 general cost increase of 3 to 5 per cent in local systems, indicating a shift towards more affordable home options for buyers.
Melbourne's property sector stands apart from the rest, expecting a modest annual increase of as much as 2% for homes. As a result, the typical house cost is predicted to stabilize in between $1.03 million and $1.05 million, making it the most slow and unpredictable rebound the city has ever experienced.

The Melbourne real estate market experienced a prolonged slump from 2022 to 2023, with the typical home price visiting 6.3% - a considerable $69,209 decline - over a period of five successive quarters. According to Powell, even with a positive 2% development projection, the city's house rates will just manage to recoup about half of their losses.
House prices in Canberra are expected to continue recuperating, with a projected mild development varying from 0 to 4 percent.

"According to Powell, the capital city continues to deal with challenges in accomplishing a steady rebound and is anticipated to experience an extended and sluggish speed of development."

The forecast of approaching rate hikes spells problem for potential homebuyers struggling to scrape together a deposit.

According to Powell, the ramifications differ depending upon the type of buyer. For existing property owners, postponing a choice might result in increased equity as prices are forecasted to climb. On the other hand, newbie purchasers might need to set aside more funds. Meanwhile, Australia's real estate market is still having a hard time due to price and repayment capacity concerns, intensified by the ongoing cost-of-living crisis and high rates of interest.

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

According to the Domain report, the minimal availability of new homes will remain the primary element influencing residential or commercial property worths in the future. This is because of an extended scarcity of buildable land, slow construction permit issuance, and elevated building expenses, which have restricted housing supply for an extended period.

In somewhat favorable news for potential purchasers, the stage 3 tax cuts will provide more cash to families, raising borrowing capacity and, for that reason, purchasing power throughout the country.

Powell said this could further reinforce Australia's housing market, but may be offset by a decline in real wages, as living costs rise faster than salaries.

"If wage growth stays at its present level we will continue to see stretched cost and dampened demand," she said.

In regional Australia, house and unit prices are expected to grow moderately over the next 12 months, although the outlook varies between states.

"All at once, a swelling population, sustained by robust increases of brand-new citizens, offers a considerable boost to the upward trend in property values," Powell stated.

The revamp of the migration system might activate a decrease in regional residential or commercial property demand, as the new skilled visa path gets rid of the need for migrants to reside in local locations for 2 to 3 years upon arrival. As a result, an even bigger percentage of migrants are likely to converge on cities in pursuit of superior job opportunity, consequently minimizing need in regional markets, according to Powell.

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