- April 2025
Australian Property
market update
1. Australian Property Update
2. Rental Market Insights
3. Pimipama Case Study
4. Melbourne’s Potential
5. Werribee Opportunity
Reflecting on the Pandemic
March marked five years since Australia’s first COVID-19 lockdown which significantly reshaped the property. While early predictions suggested a downturn, housing values instead surged, fuelled by record-low interest rates and government stimulus. From March 2020 to March 2025, national house values rose by 41% (CoreLogic) and Austral-ia’s population grew by over 1 million. It’s no wonder we are in a housing crisis.
Capital City Performance 2020-2025:
- Sydney: House prices in Sydney increased by 27.7% and the population grew by roughly 300,000 people.
- Melbourne: Median house price increased just shy of 11.5% with population increasing by a whooping 424,000 people.
- Brisbane: Median house prices jumped by a robust 29.7% since March 2020. Population increased by 162,000 during this period.
- Perth: Median house prices increased by 15.7%, supported by the resilient mining sector. Perth’s population saw a growth 127,000 people.
- Adelaide: Median house prices increased by 77.3% from 2020 to 2025. Population saw a growth of 100,000 people.
Rental Market Insights: Consistent Returns
Over the past three years, house rental prices across Australia have experienced a steady increase, with a nationwide growth rate of 6%. However, Adelaide, Brisbane, and Melbourne recorded even higher growth rates. Adelaide saw the highest increase at 8.7%, followed by Brisbane at 7.6% and Melbourne at 7.3%. This upward trend reflects strong demand for rental properties, driven by factors such as population growth, supply constraints, and shifting housing preferences.
Market Outlook
CoreLogic’s latest Home Value Index reports a national median dwelling value of $885,361 as of March 2025- an 8.5% increase from the end of February.
Among capital cities, Perth leads annual growth at 11.3%, followed by Adelaide (10.6%) and Brisbane (7.5%). Sydney showed a slower growth of 1.2% since March 2024 & Melbourne saw a decline of -2.5%.
Based on previous cycles we would expect the above capital cities to have an accelorated growth rate before the market starts to plateau.
The high migration and dropping interest rates support many Property Specialists’ and Econminists’ forcasts of even faster gains in 2025 than we saw in 2024.
The Pimpama Case Study: Why Timing the Market Matters
A key example of why investors should focus on long-term growth rather than short-term market fluctuations is the case of a property in Pimpama Village. A client originally contracted a 4-bedroom house for $525,000 in 2021. At the time, the valuation was only $480,000, leading the client to terminate the deal.
Fast forward four years, and the same property, purchased by one of our team members, is now valued at $825,000—showing a $300,000 capital gain in just 3.5 years. This highlights how market valuations can miss out on key drivers like population growth, infrastructure investment, and supply shortages.
Melbourne’s Potential: The Right Time to Invest
Despite a more moderate growth rate in the past few years, Melbourne remains a highly attractive investment opportunity, particularly now as the market shows signs of a downturn. Here’s why:
- Population Growth: Melbourne is Australia’s fastest-growing capital, with a population of 5 million. It’s expected to grow to 8.8 million by 2041. This booming population creates long-term demand for housing.
- Infrastructure Investment: Victoria is amid its largest infrastructure investment in 20 years, with the $90 billion Big Build initiative driving growth in key areas, offering a solid foundation for future market stability.
- Affordability: Melbourne’s median house price currently sits at just 62% of Sydney’s—a notable shift, considering it typically hovers above 80%. This gap has made Melbourne significantly more affordable, especially given that Melburnians earn only 5–10% less than their Sydney counterparts. It’s clear that Melbourne is becoming an increasingly attractive option for home buyers, investors, and renters alike.
- Supply Shortage: Melbourne has been experiencing an undersupply of properties over the last two years. This is now creating the same perfect storm we saw between 2012-2018 in Melbourne (see image below). In March 2025, the city saw a 0.5% price increase. This marks the second month of growth in 11 months, signalling its growth cycle is starting.
- Rental Yield Potential: With a guaranteed 4.2% rental yield from Custodian, there is strong confidence in the market’s ability to deliver solid returns for investors, particularly considering the current market conditions.
Investor Takeaways
- Market Rebound: While Melbourne’s market has slowed, it’s primed for future growth, especially as post-rate cut sentiment continues to affect the market.
- High Growth Potential: Melbourne offers significant upside potential driven by high population growth, ongoing infrastructure investment, and affordability.
- Solid Rental Yields: Even as rental growth slows, the rental market remains tight, providing investors with consistent yields.
- Long-Term Value: Investors should focus on the long-term fundamentals of the market—such as infrastructure development, population growth, and supply shortages—rather than reacting to short-term market shifts.
Werribee: Melbourne’s Next Growth Hotspot?
Werribee is emerging as a similar opportunity to Pimpama in 2021. With significant population growth, strong infrastructure investment, and increasing demand, Werribee will soon experience a similar surge in property values. Current valuations may not yet reflect its full potential, making it a prime target for forward-thinking investors. With developments to road & rail, employment hubs, schools & universities, it’s no wonder it’s one of Melbourne’s fastest growing region.
Exclusive Client Offering
Reserve a blocks in one of Melbourne’s fastest growing areas.
Upcoming Client Events
Join us for our next Client Event with the Custodian Team
Brisbane Client Event - Wednesday 30th April 2025
Venue: Alchemy Restaurant and Bar Brisbane
Location: 175 Eagle St, Brisbane City QLD 4000
Event check in at 6:30pm for a 6:45pm start
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Thank goodness we’ve put last week behind us. The relentless news cycle was draining, dominated by the same old faces in the nation’s capital.