February 2025

Important figures all property investors need to know:

Final House Price Data for 2024: A Snapshot of Australia’s Property Market

As 2024 wraps up, CoreLogic has released its final data for the year, showing a mixed performance across Australia’s property market. While some cities experienced strong growth, others recorded declines due to affordability pressures and slowing demand. Here’s a breakdown of the performance in January 2025 and an outlook for the near future.

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A Market in Motion: Sales and Supply Dynamics

As we move through the early months of 2025, Australia’s housing market remains under significant pressure, with demand far exceeding supply. Currently, only 165,000 dwellings are listed for sale, despite 640,000 properties changing hands over the past year. This translates to just 3.1 months of available supply—well below the 5–6 months typically seen in a balanced market. The scarcity of listings has intensified competition, fuelling bidding wars and pushing prices even higher.

Property Values: A Persistent Climb

Housing values have seen remarkable growth over the years. Detached houses have surged 3.6 times since 2000, with an annual appreciation rate of 6.9%, while apartments and townhouses have seen a 2.5x increase, growing at 5.5% per annum. The median house price in capital cities now exceeds $1 million, while apartments average around $654,000—a reflection of sustained demand and constrained supply.

The Tightening Rental Market

With a residential vacancy rate of just 1.3%, Australia’s rental market is under immense pressure. This scarcity has pushed median weekly rents for three-bedroom houses to $600, marking a twofold increase since 2000 at an annual growth rate of 4.7%. Tenants are finding it increasingly difficult to secure affordable rentals, adding to the urgency for new housing supply.

Conclusion: A Market in Transition

House prices continue to fluctuate as interest rates and economic conditions shape the market. While Brisbane, Adelaide, and Perth show strong growth, Melbourne and Sydney face affordability constraints. Rental conditions are easing, providing some relief for tenants.

Australia’s Interest Rate Forecast for 2025: Are Rate Cuts on the Horizon?

With interest rate cuts likely in 2025, borrowing capacity is expected to improve. Financial markets have priced in a 95% chance of a 0.25% rate cut in February, with further reductions expected throughout the year.

The cash rate is projected to fall to 3.35%-3.6% by year-end.
Reduced mortgage rates could stabilize the market and support housing demand.
Affordability remains a challenge despite potential rate cuts.

Potential Implications

Homeowners with variable mortgages may see lower repayments.
Housing demand could rise if borrowing power increases.
A gradual recovery is expected, but affordability constraints and population growth normalization could slow momentum.

Australia’s property market in 2025 is set for a period of modest growth and stability. While some regions continue to expand, others face headwinds from affordability constraints and tighter credit policies. Buyers and renters should stay informed as economic conditions evolve.

Population Growth: A Key Driver of Demand

Australia’s population grew by 650,000 people in 2024, driven by overseas students (59%), net migration (24%), and natural increase (17%). Growth was concentrated in Victoria (+165,100), New South Wales (+143,200), Queensland (+125,800), and Western Australia (+81,400), which together accounted for 94% of the total increase.

Looking ahead, the population is projected to grow by 2.3 million by 2030, with an annual increase of 470,000 over the next five years and 395,000 per year over the next decade. This surge will require 1.2 million new dwellings (240,000 per year), with 80–90% of demand in NSW, Victoria, Queensland, and WA.

With supply already tight, housing demand will continue to outpace availability, pushing prices higher and increasing pressure on policymakers to boost development and infrastructure.