- Australia’s rental growth (Source: Domain)
The Domain Rent Report for March 2025 indicates that Australia’s rental growth has hit a four-year low, with houses and units at record highs but growth being the slowest in years across most capitals. Despite this, vacancy rates remain low, particularly in cities like Adelaide, Hobart, and Perth. The rental market remains competitive, with Sydney, Melbourne, Brisbane, Adelaide, and Perth experiencing their slowest March quarter growth in several years. The affordability ceiling is becoming increasingly apparent, with unit rents outpacing house rents in certain cities. The data suggests that Australia is still a landlords’ market, but the momentum is shifting towards greater stability in the rental market.
- Victoria’s housing market (Source: REIV)
The Real Estate Institute of Victoria (REIV) reported positive quarterly price growth for the first time since December 2021, with the median dwelling price increasing across metropolitan and regional Victoria. The inner-city suburb of Port Melbourne saw the highest growth at 18.6%, while Stawell’s regional town experienced a 7.9% increase. REIV CEO, Kelly Ryan, attributed the results to improved buyer sentiment and strong regional demand. Two Melbourne suburbs, Mordialloc and Preston, saw quarterly median unit and apartment price growth of 26.9% and 20.8%, respectively. Ryan emphasized that the results reflect the diversity of Victoria’s property market and the renewed confidence among buyers.
- Construction costs (Source: Liv Adams)
The March quarter of 2025 saw the lowest growth in residential construction costs in Australia in the last 15 years, with a national increase of only 0.4%. This follows two consecutive quarters of 1% growth, resulting in an annual rise of 2.9%. Queensland experienced the highest quarterly increase at 0.6%, while Victoria and South Australia recorded the lowest growth rates at 0.3%. Construction costs remain significantly elevated due to the 31.3% jump since the onset of COVID-19, and competition for skilled trades with the infrastructure sector is expected to persist. Despite these challenges, there is optimism due to the alignment of dwelling approvals with the decade average and the potential for rising property values to enhance the feasibility of new projects.
- The Australian Economy and Financial Markets (Source: RBA)
The Australian economy is growing and creating jobs at record levels despite global economic concerns. Inflation is coming under control, but the impact of Trump’s tariffs on inflation is uncertain. The Australian residential property market is valued at $11.1 trillion, with 50% of homeowners not having a mortgage against their homes. The economy heavily relies on exports, particularly to China, which is currently facing economic challenges. Aussies have more equity in their homes and more savings than three years ago, but their savings ratio has dropped to near pre-pandemic levels. The economy is heavily reliant on exports, particularly to China, which is currently facing economic challenges.
- Queensland’s Residential Activation Fund (Source: Property Buzz)
Queensland’s $2 billion Residential Activation Fund has opened applications for infrastructure proposals related to new housing projects. The government is prioritizing shovel-ready projects and will distribute funding over two decades, with at least 50% allocated to regional areas outside of southeast Queensland. The goal is to expedite home completion and ease the housing crisis by removing development delays caused by insufficient infrastructure.
- Australian home building costs (Source: Property Buzz)
US President Donald Trump’s announced tariffs could increase new home building costs in Australia, potentially leading to more interest rate cuts from the Reserve Bank. The tariffs, which apply to most countries including Australia, could result in higher prices for imported goods used in construction, impacting new builds and renovations. Construction costs have already risen significantly in recent years, and the housing market could experience a tug of war between headwinds and tailwinds. Financial markets predict up to four interest rate cuts this year in response to the tariffs and slower global growth. The tariffs are part of an escalating global trade war and could exacerbate housing supply challenges in the US.
- Australia’s housing shortage (Source: Joseph Ballota)
Australia experienced a housing shortage in 2024, with 62,000 fewer homes built than needed. The improvement in the housing shortfall was due to slower population growth rather than increased construction. Dwelling approvals remain weak, leading to ongoing housing undersupply in many regions. This housing crisis is driving up property prices and rents, particularly in supply-strained markets like Western Australia and Queensland. Factors contributing to the shortage include not enough approvals, labor and material shortages, demolitions, and high interest rates. For investors, this presents both challenges and opportunities, as they can benefit from strong rental returns and capital growth in undersupplied markets. However, affordability concerns may limit some buyers, and developers face challenges due to cost pressures and slow approvals.
- National housing values (Source: Sebastian Holloman)
The Australian housing market has experienced a significant surge in values over the past five years, with a 39.1% increase, adding approximately $230,000 to the median dwelling value. This growth is attributed to strong underlying demand, tight supply, and a resilient economy. However, this growth cycle remains moderate compared to earlier periods of financial deregulation, strong economic growth, and favorable demographic shifts that led to remarkable value growth. The latest five-year growth is still below the 75.5% growth achieved over the five years to March 1989 and the record 79.7% growth in the five years to December 2003. The timing and magnitude of peak growth vary across capital cities, with Sydney and Melbourne experiencing the strongest growth in the late 1980s, and Brisbane, Adelaide, Perth, Hobart, and Canberra recording their largest gains in the mid-2000s.
- Brisbane Unit sales (Source: InfoTrack)
Brisbane has surpassed the Gold Coast as the leading hotspot for residential unit sales in Queensland, according to the InfoTrack Property Market Update. Brisbane City recorded the highest volume of unit sales from January to March 2025, marking the first time it has taken the top spot. Factors contributing to Brisbane’s renewed interest include increased investor activity, urban migration, and an uptick in apartment stock. Three other Brisbane suburbs, Fortitude Valley, South Brisbane, and West End, also ranked among the top 10 performing Queensland suburbs for unit sales. Despite Brisbane’s strong performance, Gold Coast suburbs still held 50% of the top 10 spots. House sales data indicated a trend towards growth in outer-metro areas, with several suburbs debuting on the top 10 list, including Springfield Lakes, Burpengary, Ormeau, and Kallangur. Caboolture in Moreton Bay remained Queensland’s most active housing market for a second consecutive quarter.
- CoreLogic Auction Results (Week ending 6 April 2025)
(Total Auction / Clearance Rate)
– Sydney: 898 / 59.9%
– Melbourne: 1,142 / 64.1%
– Brisbane: 168 / 55.4%
– Perth: 10 / 30%
– Canberra: 90 / 58.9%
– Adelaide: 117 / 70.1%
– Tasmania: 2 / 0%
– Combined Capitals: 2,427 / 61.8%
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