Here’s Our Top 5 Real Estate and Market Predictions for 2025
The new year is an occasion for us to reset and refocus on our goals and plans and renew our vigour to go after them. Whether your New Year goal is to get your foot on the property ladder, boost your finances through property investment, downsize or relocate, or just hope for a drop in interest rates to give breathing room in your mortgage repayments.
What may be in store for us this year? Here, we highlight the top predictions real estate experts predict will happen in the market for 2025.
1. Interest rates
While we can’t predict what the RBA will decide, most experts predict that interest rate cuts will not happen anytime soon. With President Donald Trump returning to the Oval Office, his promise to tax Chinese goods could push up prices globally, including in Australia. If inflation continues to grow, the RBA may continue increasing the interest rates to keep it under control.
On the other hand, if the economy struggles and unemployment grows, the RBA may be forced to reduce interest rates sooner than they might like. Either way, global events happening right now mean we are in for interesting times ahead.
2. New Hotspots
Perth was a rising market in the last couple of years, but there is evidence that it has slowed down, with rising listings and slower sales volumes.
Experts are predicting Darwin to be the next hotspot for 2025. Darwin has had growing economic activity recently, and housing is still considered affordable. It currently has the highest rental yield of all the other capital cities, with 5.9% for houses and 7.3% for units.
Another hotspot expected in 2025 is Townsville, with a median house price of $520,000 and predicted to grow by at least 25% this year.
In contrast, the two largest cities, Sydney and Melbourne, have had a slight downturn. House prices fell 0.2% in Sydney in November 2024, and there were more houses for sale in Sydney and Melbourne in December 2024 than in December 2018.
3. More housing stock
Baby Boomers hold nearly half of Australia’s private wealth. As many retire and downsize, more housing stock will enter the market, presenting an opportunity for first-time home buyers to get on the property market ladder.
Experts say many Baby Boomers live in large family homes that are often hard to maintain. These properties will provide opportunities for young families to buy available stock as they come on the market. With 710,000 people intending to retire in the next five years, this could free up a significant amount of housing stock in the market. Many of these retirees will also be looking for a tree or sea change or move into smaller homes, so coastal locations and smaller dwellings such as townhouses could see a boost in demand.
4. Demand for sustainable homes
Demand for sustainable homes has been increasing in the last few years, and it will continue to rise in 2025 as the cost of living increases. Eco-conscious living has been the new buzzword for some time now, with more and more homeowners opting for solar-powered systems and better insulations for their homes, reducing their carbon footprint and lowering their utility bills.
Developers are also including eco-conscious design principles in their buildings in accordance with buyer demands, as having an energy-efficient home is no longer a perk for many but a necessity.
5. Artificial Intelligence
Artificial intelligence (AI) is here to stay, and it is influencing and changing many industries, including the real estate industry. AI’s many uses include being used as a major tool for analysing market trends, and user behaviour. Its powerful predictive tools can process large amounts of data and provide accurate analysis, which will assist investors in making more informed decisions when searching for property.
Looking to meet your property goals in 2025? Contact us, and let’s chat about how we can help you get the results you want.
