- Housing market (Source: CoreLogic)
In 2025, the housing market is expected to experience slower growth and sales compared to the previous year. Lower interest rates could boost housing values and transactions, but their impact will be limited. Unemployment is projected to rise, but it’s unlikely to negatively affect housing values. Net overseas migration is decreasing, reducing pressure on the rental market. Residential construction remains low, but cost pressures could help stabilize the industry.
- First home buyer activity (Source: Smart Property Investment)
First home buyers significantly increased their presence in the Australian housing market in 2024, with the number of FHB loans tripling compared to other loans. Victoria was the leading state for FHB activity, accounting for 36% of all FHB owner-occupier loans. In response to high property prices, some FHBs in New South Wales have adopted the rentvesting trend, where they buy an investment property while continuing to rent in their preferred area. This strategy allows them to balance affordability and lifestyle by factoring in potential rental income. FHB investor loans grew at twice the pace of FHB owner-occupier loans, with NSW recording the fastest growth rate.
- Inflation & rate cut (Source: ABC News)
Inflation eased in the December quarter of 2024, with price rises decreasing for essential goods and services such as fuel, pharmaceuticals, electricity, rentals, and insurance. The Reserve Bank of Australia (RBA) is expected to consider this data when making its interest rate decision on February 18, 2025. The easing inflation, combined with the unemployment rate, may influence the RBA’s decision to cut interest rates. However, the continued rise in discretionary goods and services prices could deter the RBA from making an immediate rate cut.
- Land prices (Source: Smart Property Investment)
A new report reveals that land prices in Australia have surged by 7.6% nationwide, outpacing the rise in the consumer price index and building material costs. Capital cities experienced the most significant growth, with Sydney’s median land price reaching $710,000. The persistent shortage of land for residential development remains a major constraint on housing supply. To reach the government’s goal of building 1.2 million homes over the next five years, increased urgency and commitment from governments to release more land for residential development are needed.
- “Safest” investment locations (Source: Hotspotting)
The Hotspotting report identified the top 50 “safest” investment locations in Australia, with Queensland leading the way, having the highest number of consistent suburbs. Queensland suburbs, such as Albany Creek, Narangba, and Caboolture South, offer steady price growth and high rental yields. The report emphasized the importance of consistent markets, as they provide a safe harbor for property buyers and offer significant long-term results. The report also noted that regional markets are increasingly showing steady capital growth, with half of the top 50 most consistent suburbs being in regional areas.
- Settlement trends (Source: PEXA)
The PEXA News & Media Centre provides property insights, news, and reports to help shape the future of the property industry. In 2024, there were 723,312 property settlements across Australia’s five mainland states, with a total spending of $714.7 billion. Queensland had the most settlements (198,019), followed by New South Wales (194,729) and Victoria (187,944). The economic growth slowed in 2024, but the labor market remained resilient, supporting the housing market. The aggregate value of residential property sales was highest in New South Wales ($230.3 billion), while commercial property settlements showed modest growth, with the highest growth in regional New South Wales (up 9.5% from CY23).
- Housing crisis (Source: API Magazine)
The housing crisis in Australia is worsening, with not enough new homes being built to meet demand. Median rents and house prices have significantly increased in the past five years, leading to unprecedented levels of homelessness and making home ownership seemingly unattainable for many. The National Housing Accord aims to build 1.2 million homes by 2029, but Australia is already behind schedule, with only 165,048 new homes commencing construction in the year to September 2024. Construction costs are also on the rise, with residential construction costs growing 3.4% over the 12 months to December 2024. The housing industry is calling for governments to address affordability-killing taxes, cut red tape, and address critical shortages of skilled labor to increase productivity and meet housing targets.
- Dwelling approvals (Source: Michael Matusik)
New dwelling approvals in Australia have increased by 6% but remain low, with 168,000 approvals for the year ending October 2024. Most approvals were for detached houses, and fewer than half were for attached dwellings, primarily townhouses. New apartment approvals, despite their potential to address housing supply and affordability issues, are in a slump due to high construction costs. Michael suggests that interest rates falling could lead to more housing starts, but most new supply will likely be prefabricated. He argues that Australia needs to build twice as many homes annually to address the current backlog.
- CoreLogic Auction Results (Week ending 26 January 2025)
(Total Auction / Clearance Rate)
– Sydney: 59 / 54.2%
– Melbourne: 223 / 55.7%
– Brisbane: 61 / 48.3%
– Perth: 8 / 37.5%
– Canberra: 8 / 25%
– Adelaide: 69 / 68.1%
– Tasmania: 1 / 100%
– Combined Capitals: 429 / 55.6%
🟦🟨🟦🟨🟦🟨🟦🟨🟦🟨
If you’re interested in staying updated on the Australian housing market, feel free to reach out to us. You can also follow our Facebook page and Instagram for regular updates on new listings, market trends, statistics, and insightful information.
