Amid rising living costs and mortgage pressures, homeowners have received some positive news. Real estate values have continued to climb across Australia, with prices increasing for months on end.
In October, CoreLogic reported a 0.3% increase in national property values. This marks the 21st month of growth in a row. Recently, Australia’s property market reached a new milestone. The total value of residential real estate has surpassed $11 trillion for the first time, according to CoreLogic.
Looking at capital cities, Sydney, Brisbane, Adelaide, and Perth are all experiencing record-high property values. On the Sunshine Coast in South East Queensland, property is in high demand.
So, what can we expect for property prices in 2025? Let’s break it down.
Price growth is slowing
While Australia’s property market has experienced impressive growth for nearly two years, the momentum is starting slowing. National property values rose by just 1% in the September quarter, the slowest quarterly increase since March 2023. The annual growth rate also fell from 9.7% to 6.7%, indicating the market is cooling.
Experts point to increased listings and more cautious buyer behaviour as key factors behind the slowdown. CoreLogic Economist Kaytlin Ezzy said the market is still strong in many areas. However, growth has slowed down. Buyers and investors are being more careful because of the current lending situation.
The role of supply and demand
The future of property prices in 2025 will depend on the balance of supply and demand. When sellers list more properties, buyers gain more options and may feel less inclined to act quickly, which can lead to price reductions. However, when there are fewer properties on the real estate market, competition among buyers increases, often pushing prices up. The Sunshine Coast has experienced strong population growth in recent times. It is a clear example of high demand and limited supply in the property market.
In cities like Perth, Adelaide, and Brisbane, stock levels are over 20% lower than the five-year average. This situation favors sellers and may lead to higher prices.
Interest rates could play a key role in real estate prices
The Reserve Bank of Australia (RBA) has kept the cash rate the same since November 2023. Many people expect a rate cut in the first half of 2025. If interest rates go down, people can borrow more money. This usually leads buyers to spend more, which can raise property prices. If this happens, competition in the Sunshine Coast property market could intensify even further, leading to faster price growth.
What does price growth mean for homeowners?
For those whose properties on the have appreciated in value, there may be untapped equity available to leverage. Sunshine Coast homeowners could consider using this equity to purchase an investment property or to fund home renovations, potentially increasing their property’s value even further. Simply refinancing an existing home loan, can make equity available for new purchases or renovations, whilst potentially improving the terms of a mortgage at the same time.
Some homeowners have seen their property values rise a lot during a typical 30-year mortgage. It’s worth looking into how much equity they have.
The bottom line
While it’s difficult to predict the exact direction of the property market, many economists believe that house prices will continue to rise, though at a slower pace in 2025. A recent KPMG report forecasts a 5.6% increase in national property values next year.
If you plan to buy property in 2025, it’s smart to talk about your finance options soon.
The team at Orchard Mortgage Brokers in Mooloolaba on the Sunshine Coast is ready to give expert advice. They can help you understand property trends, plus lending options for home loans and more. Call 07 5475 4500 today to discuss your options.