As we enter 2025, the Australian property market is shaping up to be an exciting space for investors. Despite the challenges of recent years, the market is recovering strongly, with significant growth opportunities emerging. Here are five key predictions for what the year holds and why now is the time to act.
1. Price Growth Continues to Build Momentum
Australia’s property market recovery, fuelled by post-COVID adjustments and increasing buyer confidence, is expected to strengthen this year. KPMG’s mid-2024 prediction of a 5.6% rise in both house and unit prices reflects a positive trend. Factors such as limited supply, sustained demand, and economic stability will continue to drive this growth. For investors, this presents an excellent chance to capitalise on properties before prices climb further.
2. Interest Rates to Boost Borrowing Capacity
The Reserve Bank of Australia (RBA) is widely expected to adjust interest rates in 2025, as inflation nears its target range. This shift will likely increase borrowing capacity and instil greater confidence among buyers. Lower rates can make the difference between hesitating and jumping into the market—particularly for first-time investors. (Want to understand how inflation impacts property? Read our recent article here.)
3. First-Home Buyers Are Ready to Move
In 2024, the number of first-home buyers increased by 9% year-on-year, and this trend shows no signs of slowing. Gen X investors are leveraging their equity to enter the market, while Millennials are adopting innovative strategies like rent-vesting. With lower interest rates likely on the horizon, many first-time buyers are poised to take their first steps towards property investment. This influx of new buyers could further stimulate the market, creating ripple effects for seasoned investors.
4. Government Action to Tackle Housing Supply
Despite a growing demand for housing, Australia continues to face significant supply challenges. Building approvals remain well below the targets needed to meet the National Housing Accord’s goals by 2029. In response, state and federal governments are introducing policy reforms and concessions aimed at alleviating the housing shortage. These measures may include incentives for developers and support for buyers, making it even more critical to stay informed about where and when to invest.
5. Uneven Growth Across Markets
While the Australian property market is set to grow overall in 2025, this growth will not be uniform. Some regions are forecast to see price increases of up to 30%, while others may experience declines of 5-7%. For investors, the key challenge will be identifying areas with the greatest potential for growth and avoiding those likely to stagnate or fall. This is where expert guidance becomes invaluable.
Why 2025 is the Year to Invest
The Australian property market in 2025 offers immense potential for those who approach it strategically. However, with market conditions varying significantly across regions, having the right insights and support is critical. That’s where The Property Mentors come in.
Our experienced team is here to help you cut through the noise and identify the best opportunities. Whether you’re a first-time buyer or a seasoned investor, we’ll guide you towards making informed decisions that align with your goals.
Don’t miss out on the opportunities this year has to offer. Contact The Property Mentors today and start your journey towards property investment success.
