What are the predicted house prices for 2024 and 2025 in Australia?
Real estate prices across most of the country will continue to rise in the next financial year, led by sizeable gains in Perth, Adelaide, Brisbane and Sydney, a new Domain report has forecast.
Across the combined capitals, house prices are tipped to increase by 4 to 7 per cent, while unit prices are anticipated to grow by 3 to 5 per cent.
By the end of the 2025 financial year, the median house price will have surpassed $1.7 million in Sydney and $800,000 in Perth, according to the Domain Forecast Report. Adelaide and Brisbane will be on the cusp of cracking the $1 million median house price, if they haven’t already hit seven figures.
The Gold Coast housing market will also soar to new records, with prices expected to rise by 3 to 6 per cent, while the Sunshine Coast is set for a 2 to 5 per cent increase.
Domain chief of economics and research Dr Nicola Powell said the forecast rate of growth was modest in most cities compared to price movements in a “strong upswing”.
“Prices are still rising but not as fast as what we saw in the past financial year,” she said.
Perth and Adelaide are the exceptions. “Adelaide has been like a steam train – you can’t stop it,” she said. “And Perth just hasn’t slowed down.”
Apartments are also set to become more expensive in the coming 12 months, with units in Sydney, Brisbane, Adelaide, Perth, the Gold Coast and the Sunshine Coast to hit new record prices.
Regional units are slated for an overall price increase of 3 to 5 per cent, which “says a lot about affordability in terms of buyers being steered towards more affordable property types”, Powell said.
Melbourne’s property market remains an outlier, with expected moderate annual growth of up to 2 per cent for houses. This will leave the median house price at between $1.03 million and $1.05 million, marking the slowest and most inconsistent recovery in the city’s history.
| Location | Houses | Units |
| Australia | 3% to 6% | 2% to 4% |
| Combined capitals | 4% to 7% | 3% to 5% |
| Combined regionals | 2% to 3% | 1% to 3% |
| Sydney | 6% to 8% | 4% to 6% |
| Melbourne | 0% to 2% | 2% to 4% |
| Brisbane | 6% to 8% | 4% to 6% |
| Perth | 8% to 10% | 4% to 5% |
| Adelaide | 7% to 9% | 4% to 6% |
| Canberra | 0% to 4% | 1% to 4% |
| Regional NSW | 0% to 3% | 1% to 3% |
| Regional VIC | -3% to 0% | 1% to 2% |
| Regional QLD | 2% to 4% | 3% to 4% |
| Gold Coast | 3% to 6% | 3% to 4% |
| Sunshine Coast | 2% to 5% | 3% to 4% |
| * Forecast percentage change in house and unit prices by the end of FY25. | ||
The 2022-2023 downturn in Melbourne spanned five consecutive quarters, with the median house price falling 6.3 per cent or $69,209. Even with the upper forecast of 2 per cent growth, Melbourne house prices will only be just under halfway into recovery, Powell said.
Canberra house prices are also expected to remain in recovery, although the forecast growth is mild at 0 to 4 per cent.
“The nation’s capital has struggled to move into an established recovery and will follow a similarly slow trajectory,” Powell said.
With more price rises on the horizon, the report is not encouraging news for those trying to save for a deposit.
“It means different things for different types of buyers,” Powell said. “If you’re a current home owner, prices are expected to rise so there is that element that the longer you leave it, the more equity you might have. Whereas if you’re a first-home buyer, it might mean you have to save more.”
Australia’s housing market remains under significant strain as households continue to grapple with affordability and serviceability limits amid the cost-of-living crisis, heightened by sustained high interest rates.
The Reserve Bank of Australia has kept the official cash rate at a decade-high of 4.35 per cent since late last year.
The shortage of new housing supply will continue to be the main driver of property prices in the short term, the Domain report said. For years, housing supply has been constrained by scarcity of land, weak building approvals and high construction costs.
“At the same time, a growing population propped up by strong migration continues to be the wind in the sail of property price growth,” Powell said.
In somewhat positive news for prospective buyers, the stage 3 tax cuts will deliver more money to households, lifting borrowing capacity and, therefore, buying power across the country.
Powell said this could further bolster Australia’s housing market, but may be offset by a decline in real wages, as living costs rise faster than wages.
“If wage growth stays at its current level we will continue to see stretched affordability and dampened demand,” she said.
In regional Australia, house and unit prices are expected to grow moderately over the next 12 months, although the outlook varies between states.
The current overhaul of the migration system could lead to a drop in demand for regional real estate, with the introduction of a new stream of skilled visas to remove the incentive for migrants to live in a regional area for two to three years on entering the country.
This will mean that “an even greater proportion of migrants will flock to metropolitan areas in search of better job prospects, thus dampening demand in the regional sectors”, Powell said.
However regional areas close to metropolitan areas would remain attractive locations for those who have been priced out of the city and would continue to see an influx of demand, she added.
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