Five Key Trends in Australia’s Property Market for 2025

As affordability remains a key driver, regions like Western Australia, South Australia, and Queensland are expected to attract strong investor interest due to their relative affordability and growth potential.

1. Affordable Markets Continue to Lead

Lower-cost markets have outperformed expensive ones in recent years, a trend expected to continue. With the RBA cash rate projected to drop by only 0.5% to 1% in 2025, borrowing costs will remain high, further boosting demand for affordable markets.

2. Rental Market Shifts

While rental growth is slowing in many regions, areas like Greater Adelaide and the ACT are seeing rising rents. Despite this deceleration, vacancy rates remain critically low due to population growth, smaller household sizes, and limited new housing supply, which could push more renters toward buying homes.

3. Improved Yields Driving Investment

In 2024, rental yield improvements led to increased investor interest. This trend is expected to continue, particularly in regions with property prices between $600,000 and $1.1 million, such as NSW coastal areas, Melbourne, Brisbane, and the Gold Coast.

4. Regional Migration Reshaping Demand

Migration from capital cities to regional areas is reshaping housing demand. Lower living costs and growing job opportunities in regional hubs are attracting residents from Sydney and Melbourne, fueling demand in smaller cities.

5. Market Recovery & Upsizing Trends

As affordability constraints ease, more homeowners may leverage capital gains to upsize. This could drive increased activity in higher-priced markets, supporting a broader property market recovery.

Looking Ahead

Australia’s property market in 2025 will be shaped by affordability, rental dynamics, and shifting investment patterns. Understanding these trends can help investors and buyers navigate opportunities and challenges effectively.