Australian Property Market Trends and Outlook – Quarter 2 2025
Australian Property Market Trends and Outlook – Quarter 2 2025
Australia’s property market is navigating a period of soft growth, mixed confidence, and emerging monetary easing. The national CoreLogic Home Value Index rose 1.0% over the quarter to April 2025—the strongest rolling three-month gain since September 2024. However, annual price growth has slowed to 3.2%, the lowest since August 2023, highlighting the market’s ongoing adjustment phase.
City and Regional Performance
Regional markets continue to outperform capital cities, with regional WA (+13.2%) and regional SA (+12.9%) leading annual growth. In contrast, Sydney (+0.9%) and Melbourne (-2.2%) remain sluggish, weighed down by affordability constraints. Meanwhile, Brisbane (+7.8%), Adelaide (+9.8%), and Perth (+10.0%) maintain strong upward momentum, supported by migration and tight supply. These trends reflect broader dynamics in the Australian real estate landscape.
Market Liquidity and Sentiment
Sales volumes in the dipped sharply in April due to public holidays and election-related uncertainty, with CoreLogic estimating just 37,774 transactions for the month—the lowest in nine months. Still, annual volumes are up 2.7%. Median days on market fell to 33, and vendor discounting tightened to -3.5%, showing that well-priced stock continues to move.
Listings and Supply
Total listings remain critically low In the current real estate climate—12.1% below the five-year average, with regional markets facing even deeper shortages (-16.7%). New listings fell 16.4% year-on-year, highlighting ongoing hesitancy among prospective sellers.
Rental Market
Rental growth has eased to 3.6% annually, the slowest pace since early 2021. Perth (5.7%), Adelaide (5.5%), and Hobart (5.4%) continue to see solid gains, while in Sydney (1.9%) and Melbourne (2.0%) show signs of moderation. Gross rental yields are holding firm, averaging 3.73% nationally, with Darwin (6.6%) and Perth (4.7%) topping the charts.
National Rental Yields
Financial Conditions and Lending
The RBA has now cut interest rates twice in 2025 effecting the property market —by 25 basis points in February and again in May—bringing the official cash rate to 3.85%. These moves were prompted by slowing inflation and weakening global economic signals, including US-China trade tensions. Lower borrowing costs and the effects of mortgage rates are beginning to lift market confidence, particularly among first-home buyers and upgraders.
Variable mortgage rates for new owner-occupiers have eased to 6.09%, and investor rates to 6.29%. Investor lending has cooled to 37.2% of total loan commitments in Q4 2024, though still above long-term averages.
Dwelling approvals are up 13.4% year-on-year, driven largely by a 49.7% surge in unit approvals. However, supply remains well below the levels needed to meet national housing targets, reinforcing long-term growth prospects for the property market.
Outlook
With the first rate cuts now behind us and more potentially on the horizon, buyer sentiment is poised to recover. Combined with undersupply and stabilising inflation, the groundwork is being laid for renewed price growth in late 2025 and into 2026—particularly in the more affordable real estate markets.
Conclusion
While price growth has softened, Australia’s property market is far from stagnant. Structural undersupply, easing rates, and resilient rental yields all point to improving conditions. Now is the time for buyers and investors to position themselves ahead of the next upswing.
With more than 20 years of experience helping families invest with confidence, I’m here to guide you through the changing landscape. Reach out today to explore how we can tailor a property investment strategy for your success.
– Matt Ivers, Vision Property Investments