The 2025 landscape for Australia’s property market is poised for dynamic shifts, influenced by unprecedented levels of infrastructure investment and evolving price growth patterns, according to InvestorKit’s Weekly Property Insights.
The report explores the major trends and forecasts shaping the opportunities for investors across the nation.
Australia’s commitment to enhancing its infrastructure is evident with an impressive over $500 billion currently being injected into new projects, and an additional $370bn slated for future plans.
Significant investments are being channeled into essential sectors such as healthcare, education, transportation, and renewable energy.
These projects not only bolster economic resilience post-COVID but also amplify property demand by generating substantial employment opportunities.
Shifts in market leadership are becoming apparent, with regional markets and the unit sector outshining traditional frontrunners, InvestorKit reported.
CoreLogic’s latest data highlighted that while combined capital city house values saw a slight decline of 0.2%, regional markets experienced a growth of 0.4%, and unit markets in these areas saw an even greater increase of 0.5%.
Cities like Adelaide and Darwin are witnessing the most substantial growth, indicating a new hierarchy in the property market.
Looking forward, units are predicted to surpass houses in price growth due to ongoing affordability challenges and a surge in demand.
KPMG’s projections suggest a 4.6% growth in unit prices by 2025, outpacing the 3.3% expected for houses.
This trend is particularly pronounced in major cities like Melbourne and Sydney, where the gap between house and unit prices continues to widen.
In response to the changing economic environment, major Australian banks are preemptively lowering fixed rates in anticipation of a Reserve Bank rate cut.
This proactive move, sparked by eased inflation and stabilising funding costs, is set to make property investment more accessible and could spur further cuts by other financial institutions, InvestorKit said.
Despite a slowdown in rental growth, the national median rent has hit a new high.
REA Group’s latest report indicated that advertised rents have increased to an average of $620 per week, with variations across capitals and regions. While rent hikes have moderated, the rental yield remains robust at 4.4%, supporting a solid investment case for the rental sector.
The 2025 property market, while facing adjustments, presents multiple layers of opportunities driven by infrastructure spending, market repositioning, and responsive lending practices.
For investors, staying informed and agile will be key to navigating this evolving landscape and capitalising on the shifts that lie ahead.
