A recent report by Domain predicts that property prices in numerous areas of the country, especially in Perth, Adelaide, Brisbane, and Sydney, are anticipated to see considerable increases in the upcoming financial
Home prices in the major cities are anticipated to increase in between 4 and 7 percent, with unit to increase by 3 to 5 percent.
According to the Domain Projection Report, by the close of the 2025 fiscal year, the midpoint of Sydney's housing rates is anticipated to surpass $1.7 million, while Perth's will reach $800,000. Meanwhile, Adelaide and Brisbane are poised to breach the $1 million mark, and might have currently done so already.
The housing market in the Gold Coast is expected to reach brand-new highs, with costs projected to increase by 3 to 6 percent, while the Sunlight Coast is expected to see a rise of 2 to 5 percent. Dr. Nicola Powell, the primary financial expert at Domain, noted that the expected development rates are fairly moderate in many cities compared to previous strong upward trends. She pointed out that costs are still increasing, albeit at a slower than in the previous financial. The cities of Perth and Adelaide are exceptions to this pattern, with Adelaide halted, and Perth showing no signs of decreasing.
Rental rates for houses are expected to increase in the next year, reaching all-time highs in Sydney, Brisbane, Adelaide, Perth, the Gold Coast, and the Sunlight Coast.
Regional units are slated for an overall rate increase of 3 to 5 percent, which "states a lot about affordability in regards to purchasers being steered towards more budget friendly home types", Powell said.
Melbourne's home market remains an outlier, with expected moderate yearly growth of approximately 2 per cent for houses. This will leave the mean house rate at in between $1.03 million and $1.05 million, marking the slowest and most inconsistent healing in the city's history.
The Melbourne housing market experienced an extended downturn from 2022 to 2023, with the typical house rate stopping by 6.3% - a significant $69,209 reduction - over a period of 5 consecutive quarters. According to Powell, even with a positive 2% growth forecast, the city's house costs will only handle to recoup about half of their losses.
Home prices in Canberra are expected to continue recovering, with a forecasted mild development ranging from 0 to 4 percent.
"According to Powell, the capital city continues to face obstacles in achieving a steady rebound and is expected to experience an extended and sluggish speed of development."
The forecast of upcoming price walkings spells problem for prospective property buyers struggling to scrape together a deposit.
"It means various things for different types of purchasers," Powell said. "If you're an existing home owner, costs are expected to rise so there is that component that the longer you leave it, the more equity you might have. Whereas if you're a first-home purchaser, it might indicate you need to save more."
Australia's real estate market remains under considerable pressure as homes continue to face affordability and serviceability limitations amid the cost-of-living crisis, heightened by continual high interest rates.
The Reserve Bank of Australia has kept the main money rate at a decade-high of 4.35 per cent considering that late in 2015.
The scarcity of new real estate supply will continue to be the primary driver of residential or commercial property rates in the short term, the Domain report said. For several years, real estate supply has been constrained by shortage of land, weak structure approvals and high construction costs.
In somewhat positive news for potential purchasers, the stage 3 tax cuts will deliver more money to homes, raising borrowing capacity and, therefore, buying power throughout the nation.
Powell stated this could further boost Australia's real estate market, but may be offset by a decrease in real wages, as living expenses rise faster than salaries.
"If wage growth remains at its existing level we will continue to see stretched affordability and dampened need," she stated.
In regional Australia, home and system rates are expected to grow moderately over the next 12 months, although the outlook varies between states.
"At the same time, a swelling population, fueled by robust increases of brand-new homeowners, provides a significant boost to the upward pattern in residential or commercial property worths," Powell specified.
The existing overhaul of the migration system might cause a drop in demand for regional real estate, with the introduction of a new stream of competent visas to get rid of the reward for migrants to reside in a local location for 2 to 3 years on getting in the nation.
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.
According to her, outlying regions adjacent to urban centers would retain their appeal for individuals who can no longer afford to live in the city, and would likely experience a surge in popularity as a result.