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

A current report by Domain predicts that property costs in numerous regions of the nation, particularly in Perth, Adelaide, Brisbane, and Sydney, are anticipated to see considerable increases in the upcoming monetary

House rates in the major cities are anticipated to rise in 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 gone beyond $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 splitting the $1 million average home cost, if they have not already strike seven figures.

The real estate market in the Gold Coast is expected to reach brand-new highs, with prices predicted to increase by 3 to 6 percent, while the Sunshine Coast is expected to see an increase of 2 to 5 percent. Dr. Nicola Powell, the chief financial expert at Domain, noted that the anticipated growth rates are fairly moderate in most cities compared to previous strong upward trends. She pointed out 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 showing no signs of decreasing.

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

According to Powell, there will be a general cost increase of 3 to 5 percent in regional units, showing a shift towards more budget-friendly residential or commercial property alternatives for purchasers.
Melbourne's property sector stands apart from the rest, anticipating a modest yearly boost of approximately 2% for residential properties. As a result, the average house rate is projected to stabilize between $1.03 million and $1.05 million, making it the most slow and unforeseeable rebound the city has ever experienced.

The Melbourne real estate market experienced an extended slump from 2022 to 2023, with the average house cost coming by 6.3% - a significant $69,209 decrease - over a period of 5 successive quarters. According to Powell, even with an optimistic 2% growth projection, the city's home rates will only manage to recoup about half of their losses.
House costs in Canberra are expected to continue recuperating, with a predicted mild growth ranging from 0 to 4 percent.

"The nation's capital has had a hard time to move into a recognized healing and will follow a similarly slow trajectory," Powell said.

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

"It suggests various things for different types of buyers," Powell said. "If you're a present homeowner, costs are anticipated 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 buyer, it might indicate you need to conserve more."

Australia's real estate market stays under significant strain as homes continue to come to grips with cost and serviceability limitations amidst the cost-of-living crisis, increased by continual high rates of interest.

The Reserve Bank of Australia has kept the official cash rate at a decade-high of 4.35 per cent because late last year.

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

In rather 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 nation.

According to Powell, the real estate market in Australia might receive an extra increase, although this might be reversed by a decline in the acquiring power of customers, as the expense of living boosts at a quicker rate than incomes. Powell cautioned that if wage growth remains stagnant, it will result in a continued battle for cost and a subsequent decrease in demand.

Throughout rural and suburbs of Australia, the worth of homes and homes is prepared for to increase at a consistent speed over the coming year, with the projection differing 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 home rate development," Powell stated.

The existing overhaul of the migration system might lead to a drop in need for local realty, with the introduction of a brand-new stream of knowledgeable visas to get rid of the reward for migrants to reside in a regional location for 2 to 3 years on going into the nation.
This will suggest that "an even higher percentage of migrants will flock to metropolitan areas looking for better job potential customers, hence moistening need in the regional sectors", Powell said.

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