New Domain report reveals price forecasts for 2025
Brisbane and Adelaide are expected to join Sydney, Melbourne, and Canberra with median house prices exceeding $1 million by late 2025, with Perth also set to surpass the $1 million mark soon after.
This was revealed in Domain’s 2024 End-of-Year Wrap and 2025 Outlook report, which provided price forecasts for the year ahead, insights into property market trends, and an overview of a year where the housing market showed resilience despite numerous economic challenges.
According to the Domain report, potential interest rate cuts could reinvigorate buyer demand, particularly in the second half of 2025, following a weaker start to the year. Lower rates, combined with eased mortgage serviceability buffers, may unlock greater borrowing capacity for buyers.
With housing shortages and affordability pressures intensifying, the federal election in 2025 is expected to bring policies targeting these issues, including potential first-home buyer incentives and construction stimulus.
As urban populations grow, increased density will drive demand for townhouses, apartments, and multigenerational living arrangements in middle-ring suburbs.
Energy-efficient homes remain highly sought after, with buyers prioritising solar panels, insulation, and other green features amid rising energy costs. Sustainable homes also command price premiums in the resale market.
“In 2024, Australia’s property market demonstrated remarkable resilience amid economic uncertainty,” said Nicola Powell (pictured above), Domain’s chief of research and economics. “Despite ongoing cost-of-living pressures and a persistently high cash rate, the market showed an impressive ability to adapt. What was expected to be a year of rate cuts, became a testament to the strength of demand, and undersupply that’s dominating and continues to push prices up, underscoring the market’s remarkable endurance.
“National property prices, which recovered in 2023, kept climbing in 2024, encouraging more sellers to enter the market, which delivered a strong spring period. This year, however, the national growth was driven by the quiet achievers — Australia’s smaller cities, that have traditionally been overshadowed by Sydney and Melbourne’s more performative property markets. In 2024, Perth, Adelaide and Brisbane gained serious momentum, emerging as standout performers.”
Powell said prices are expected to keep rising in 2025, though at a slower pace than in 2024, due to affordability pressures and more buyer options.
“Australia is likely to experience a tale of two halves in 2025,” she said. “The first half will be weaker as the dynamics of 2024 carry over, while the second half should see a rebound, with the RBA potentially moving to cut the cash rate, which would serve as a strong catalyst to drawing more buyers back to the market.”
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