Relief at last for young homebuyers with prices slated to slow

By
Orana Durney-Benson
November 13, 2024

Experts are predicting a slowdown in house price growth in 2025, spelling good news for first-home buyers. 

After years of steady house price growth, property professionals are forecasting a “gentle reset” in property prices next year, according to NAB’s Residential Property Survey for Q3. 

“Demand for homes in Australia is still going strong, although slower price growth gives those looking to buy their first home an opportunity to get into the market without the pressure of fast-rising prices,” says NAB executive Claire Righetti. 

“We’re expecting steady, but flatter growth over the coming year.” 

House price growth is forecast to slow next year. Photo: Daria Nipot

Around 300 property professionals took part in the survey. Between them, they predicted that Australian house prices would rise 1.8 per cent in 2025. 

Meanwhile, NAB has forecast a 4.2 per cent rise in property prices next year. It’s a higher figure than the survey result, but still notably lower than this year’s price trajectory, which saw capital city house prices rise by 7.8 per cent. 

First-time buyers have been hit hard by rising prices. According to the NAB report, first home buyers now make up just 29.9 per cent of total buyers. 

Investors have also taken a step back, and property sales have overwhelmingly gone to owner-occupiers with existing homes. 

Despite the slowdown in price growth, NAB believes underlying demand for Australian property is still strong. 

“Even with a slight dip in the market share for first home buyers, we’re still seeing strong demand with just over one in three buyers in established home markets being a first home buyer,” says Righetti. 

“It’s a good reminder that the right timing and options are out there for those looking to get on the property ladder.” 

With construction costs still putting a dampener on dwelling completions, the bank believes Australia is unlikely to see a “significant rebalancing” of housing supply in the near future.

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