Economic volatility driven by global events is prompting fresh confidence in the Australian property market, according to Herron Todd White’s Month in Review – June 2025.
The firm expects the Reserve Bank (RBA) may cut interest rates again, delivering much-needed relief to borrowers.
“Many economists are anticipating another rate cut to provide additional economic stimulus, and we believe the RBA may indeed choose to act decisively to help bolster Australia’s economy during this challenging period,” said HTW CEO Gary Brinkworth (pictured left).
One of the big four banks has already flagged the possibility of a 0.5% drop in July, which could significantly boost household borrowing capacity and investor confidence.
“Any downward shift will deliver further relief to mortgage holders and increase borrowing power for anyone looking to invest,” Brinkworth said. “This is positive news for property owners across major population centres.”
Confidence is building in Australia’s property market, with Cotality (formerly CoreLogic) reporting a 0.6% rise in housing values in June and a 1.4% lift over the quarter. Meanwhile, ABS data shows building approvals rose 3.2% in May – up 6.5% year-on-year – marking a clear break from recent declines.
Despite broader uncertainty, Brinkworth said the fundamentals of Australian property remain resilient.
“Well-chosen real estate has consistently demonstrated its ability to ride out short-term market volatility and deliver excellent long-term benefits to those who secure quality assets with strong fundamentals,” he said.
This month’s feature analysis explores where Australians can buy a home or investment property for $750,000, revealing how buyer opportunities differ across metro and regional locations.
“What’s particularly compelling about this month’s analysis is that regardless of service area, viable opportunities exist for buyers across all population centres at the $750,000 level,” Brinkworth said.
“The key, as always, lies in selecting real estate with the right underlying drivers to ensure long-term returns meet expectations.”
Australia’s office market is undergoing a fundamental transformation in response to hybrid work.
Greg Mullins (pictured right), HTW’s commercial director, said the shift is creating demand for human-centric, tech-integrated workspaces.
“Companies are no longer solely focused on maximising desk space but on creating adaptable environments that foster collaboration, creativity and connection for employees who split their time between the office and remote work,” Mullins said.
He said demand is growing for:
“The shift away from traditional cubicle farms towards these more varied and human-centric spaces is a major driver of refurbishment activity,” Mullins said.
Despite high CBD vacancy rates in Q1 2025 – Melbourne at 18%, Sydney at 12.8%, Brisbane at 10.1%, and Perth at 15.3% – premium office space remains in demand.
“Tenants are increasingly seeking premium-grade assets with modern infrastructure, high ESG ratings and attractive amenities,” Mullins said.
Yet the HTW commercial director noted that affordability is influencing decisions more than prestige.
“Rather than a blanket demand for premium, there’s a pragmatic approach emerging where businesses are seeking assets that meet minimum sustainability requirements and offer value,” Mullins said.
Over 207,000sqm of upgraded CBD office stock is currently under construction or likely to proceed, with an additional 78,000sqm planned for non-CBD locations.
Fit-out costs have jumped around 11% in the past year, led by Sydney and Melbourne.
Mullins said rising materials and labour costs are pushing refurbishment budgets higher, especially for advanced hybrid-ready offices.
“The refurbishment market is not without its challenges. Rising construction costs driven by limited builder availability, increasing material costs and labour shortages are pushing development costs to unprecedented levels,” he said.
In response, more landlords are opting for targeted upgrades rather than full redevelopments – focusing on amenities and ESG compliance.
Meanwhile, smart technology is reshaping expectations for tomorrow’s workplaces.
“This involves the integration of AI devices, automated lighting and climate control systems, occupancy sensors and advanced audiovisual systems to enhance efficiency, comfort and productivity,” Mullins said.
Beyond commercial and residential, HTW’s rural team highlighted the growing influence of Australia’s emerging carbon market.
“Two of our most experienced directors deliver a comprehensive perspective on this rapidly evolving sector, which represents a significant new revenue stream for landholders,” Brinkworth said.
