What does 2025 hold for housing values in your city? The experts weigh in
Factors such as migration levels, rental demand and persistently high interest rates are impacting on some major centres more than others
5 min
Australian house prices are forecast to continue rising in 2025 — but at a slower pace. Supply of homes for sale will remain constrained and potentially higher interest rates hanging around for longer will continue to limit both finance availability and affordability.
Moderating population growth as migration rates normalise is expected to soften demand. However, this will be offset somewhat by rising rents continuing to encourage some people to buy.
In KPMG’s Residential Property Outlook, chief economist Dr Brendan Rynne says: “When the cost of renting is comparable to the cost of buying and owning a similar property, households may opt for home ownership, potentially driving up house prices.”
The research team at Domain notes that more people living alone will continue to put pressure on home values and rents in FY25. COVID and the opportunity to work from home prompted many people to leave shared inner city rental accommodation and set up their own homes in more affordable areas. Meantime, as our population gets older, more people are forced to live alone due to marriage breakdown or the death of a spouse.
Some markets will see superior apartment price gains compared to houses. CBA senior economist Belinda Allen says affordability challenges have “seen drivers of home price growth switch slowly”, as more buyers accept they cannot afford a house. This trend is most notable in mid-tier capital cities like Perth, Brisbane and Adelaide where prices have risen most.
Ms Allen adds: “We are seeing a similar thematic in the rental market; national unit rents are up 22 percent over the past year compared to 16 percent for house rents.”
Here is a snapshot of predictions for property price growth in the period ahead.
Sydney
Domain forecasts 6 to 8 percent growth for house prices, taking the median above $1.7 million by the end of FY25. Domain also tips 4 to 6 percent growth for apartments, which would make Sydney one of the best-performing unit markets of FY25.
In the calendar year of 2025, KPMG’s predictions are 5.3 percent house price growth and 5.6 percent for units. CBA’s predictions are 4 percent growth for Sydney home values overall.
Melbourne
Domain forecasts 0 to 2 percent growth for house prices in what is now “the slowest and most inconsistent recovery in the city’s history”. Domain tips better growth for apartments at 2 to 4 percent. Houses will underperform because of high supply compared to demand, and the introduction of significantly higher land taxes for investors. By the end of FY25, the city will still not have regained its median price losses from the 2022-23 downturn.
In the calendar year of 2025, KPMG’s predictions are 6.5 percent growth for both houses and apartments in Melbourne. CBA’s predictions are 4 percent growth for dwelling values overall. CBA’s Ms Allen says that once investors get used to the taxation changes, they may look to Melbourne for value and greater capital growth potential outside the recent top-performing mid-tier cities.
Brisbane
Domain predicts 6 to 8 percent house price growth in FY25, which may see Brisbane crack the million-dollar median for the first time. Unit prices are tipped to grow by 4 to 6 percent, which would make Brisbane one of the top-performing unit markets of FY25.
In the calendar year of 2025, KPMG’s forecasts are 5.1 percent house price growth and 2.5 percent for units. CBA’s predictions are 7 percent growth for dwelling values overall.
Adelaide
Domain sees 7 to 9 percent growth for house prices in Adelaide, with the city likely to reach a million-dollar median by December 2025. The unit market is forecast to be one of the best in the country with 4 to 6 percent growth in FY25.
In the calendar year of 2025, KPMG’s predictions are 5.9 percent house price growth and 4.6 percent for units. CBA’s predictions are 9 percent growth for dwelling values overall.
Perth
Perth will dominate the capital cities with house price growth of 8 to 10 percent in FY25, according to Domain. Unit prices are forecast to lift by 4 to 5 percent, but even at the top growth rate, the median will still be under a very comparatively affordable $450,000.
In the calendar year of 2025, KPMG’s forecasts are 5.2 percent house price growth and 8 percent for units. CBA’s predictions are 12 percent growth for home values overall.
Canberra
Canberra is only just moving into its recovery now, with house prices likely to see mild growth of 0 to 4 percent in FY25, according to Domain. Unit prices are tipped to increase by 1 to 4 percent. Over the past few years, the ACT Government has encouraged more strata-title development as new land supply runs out amid ongoing population growth, and as residents get older and need more downsizing housing options.
KPMG’s predictions are 6 percent house price growth and 4.1 percent for units in Canberra in the calendar year 2025.
Hobart
KPMG’s forecasts are 5.7 percent house price growth and 5.3 percent for units in Hobart in the calendar year 2025. KPMG said weak economic conditions in Melbourne will directly affect Hobart, with flow-on impacts to property values.
KPMG’s Dr Brendan Rynne said: “Given the interconnected nature of these two markets, the sluggish performance in Melbourne is likely to have a ripple effect on Hobart’s economic prospects.”
Regional Australia
Domain Research says the removal of incentives for migrants to settle in regional areas will impact population growth and housing demand in FY25. Offsetting this will be the construction sector focusing more on city projects amid a severe undersupply nationwide, thereby keeping supply of new homes in regional areas tight. Towns with close proximity to the cities will remain attractive for buyers priced out of metro markets.
Domain forecasts moderate growth for regional Queensland with 2 to 4 percent house price gains and 3 to 4 percent unit price gains. The Gold Coast and Sunshine Coasts should crack new record house prices in FY25, with Domain tipping 3 to 6 percent growth for houses and 3 to 4 percent growth for units on the Gold Coast and 2 to 5 percent growth for houses and 3 to 4 percent growth for apartments on the Sunshine Coast.
Growth will be sluggish in regional NSW with 0 to 3 percent gains for houses and 1 to 3 percent gains for units. Houses prices in regional Victoria may decline in FY25, with forecasts of between a 3 percent fall and 0 percent growth. Domain tips unit prices to lift 1 to 2 percent.
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The Republican nominee says it would help bring down home prices, though these buyers account for a fraction of U.S. home sales
3 min
Former President Donald Trump said he would ban undocumented immigrants from obtaining home mortgages, a move he indicated would help ease home prices even though these buyers account for a tiny fraction of U.S. home sales.
Home loans to undocumented people living in the U.S. are legal but they aren’t especially common. Between 5,000 and 6,000 mortgages of this kind were issued last year, according to estimates from researchers at the Urban Institute in Washington.
Overall, lenders issued more than 3.4 million mortgages to all home purchasers in 2023, federal government data show.
Trump, the Republican presidential nominee, made his comments Thursday during a policy speech to the Economic Club of New York in Manhattan.
Housing remains a top economic issue for voters during this presidential election. Rent and home prices grew at historic rates during the pandemic and mortgage rates climbed to levels not seen in more than two decades. A July Wall Street Journal poll showed that voters rank housing as their second-biggest inflation concern after groceries.
Both major candidates for the 2024 presidential election have made appeals to voters on housing during recent campaign stops, though the issue has so far featured more prominently in Vice President Kamala Harris ’s campaign.
Trump has blamed immigrants for many of the nation’s woes, including crime and unemployment. Now, he is pointing to immigrants as a cause of the nation’s housing-affordability crisis. Yet some affordable-housing advocates and real-estate professionals said Trump’s mortgage proposal would fail to bring relief to priced-out home buyers.
“It’s unfortunate that given the significant housing affordability crisis that is widely acknowledged across most partisan lines, we are arguing about a minuscule segment of the market,” said David Dworkin, president of the National Housing Conference, an affordable-housing advocacy group.
Gary Acosta, chief executive of the National Association of Hispanic Real Estate Professionals, a trade organization, said, “It’s just another effort to vilify immigrants and to continue to scapegoat them for any issues that we have here in the United States.”
A Trump campaign spokeswoman didn’t immediately respond to a request for comment.
Undocumented immigrants in the U.S. can obtain an obscure type of mortgage designed for taxpayers without Social Security numbers, most of whom are Hispanic. The passage of the USA Patriot Act of 2001 allowed banks to use identification numbers from the Internal Revenue Service as an alternative to Social Security, extending a number of financial services to people without legal status for the first time.
Mortgage loans for undocumented immigrants are typically higher interest and borrowers include legal residents who have undocumented spouses, Acosta said. Lenders include regional credit unions and community-development financial institutions.
In his speech, Trump said that “the flood” of undocumented immigrants is driving up housing costs. “That’s why my plan will ban mortgages for illegal aliens,” he said.
Trump didn’t elaborate on how he would enact a ban on such loans.
Though mortgages for undocumented people living in the U.S. are relatively rare, residential real-estate purchases by foreign nationals are big business , especially in expensive coastal cities such as New York and Los Angeles. These sales have declined in recent years, however.
Close to half of foreign purchases are made by people residing abroad, while the other half are made by recent immigrants or residents on nonimmigrant visas, according to an annual survey by the National Association of Realtors. Many affluent foreigners buy U.S. homes with cash instead of obtaining mortgage financing.
In his Thursday speech, which focused mostly on other economic matters such as energy and taxation, Trump proposed other measures to bring down housing costs, including cutting regulations for builders and allowing more building on federal land. Similar ideas appeared in the housing policy outline Harris released in August .
The former president has spoken on housing-related issues in speeches at other recent campaign stops, including in Michigan last month, where he touted his administration’s 2020 overturn of a policy that had encouraged cities to reduce racial segregation .
“I keep the suburbs safe,” Trump said. “I stopped low-income towers from rising right alongside of their house. And I’m keeping the illegal aliens away from the suburbs.”
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