If you are questioning where property markets are heading in 2025, you are not alone! It is currently the most asked question I get. Of course, with Australia made up of multiple different property markets, the full specific answer to that will be very different for every person, but the general trends are interesting and can point to where an individual market can expect to go.
Over the year 2024, dwelling values (as reported by CoreLogic) were relatively stagnant in Sydney (+2.3%) and Melbourne (-3.0%), whilst double digit gains were seen in Brisbane (+11.2%), Adelaide (+13.1%) and Perth (+19.1%).
Melbourne notably is 6.4% below its record high, which was in March 2022, whereas those other 4 cities are all at or near record highs.
In fact, Melbourne, which was in 2020 Australia’s second most expensive capital city, is now 5th on that list, with the median house price now at the biggest discount to Sydney that it has been in 20 years.
It has been great to see Melbourne first home buyers taking advantage of that opportunity whilst they can. Integrity Finance has been processing record numbers of first home buyers, with ABS lending data also showing the strength of that market in Victoria.
Will Melbourne continue to trade at such an unusual discount compared to the other cities? Consensus is that it will not. The pendulum is expected to swing back, the question is when not if.
Interestingly interstate investors are starting to focus on opportunity in Melbourne – sometimes purchasing opportunities look better from afar! I expect Melbourne property over the next two years to play significant catch up and reverse the recent underperformance.
Long term prospects for property across Australian capital cities remains strong. Population growth and decreasing average occupancy per household continues to fuel demand faster than we can increase supply.
Consumer confidence has been low, partly caused by interest rate increases after the record lows during covid. This is transitory.
Our advice continues to be: If you are interested in buying property and are in a position to do so, then moving sooner rather than later is recommended.
Integrity Finance Australia has been serving the community since 2006. If you have any questions on the issues raised in this article or borrowing capacity or your home loan in general, then please call or email your broker direct, or contact head office via support@ifafinance.com.au , or 03 9511 8883.