Australia's property market is showing signs of renewed strength, including solid earnings and mortgage growth. It’s also the latest hint that property prices may be heading north.
As earnings across Australia's financial sector kept pace last week, signs of optimism in the nation's property markets also continued to gain traction.
On Friday, REA Group, the parent company to Mortgage Choice, PropTrack and realestate.com.au., among other brands, reported a 12% in revenues during the most recent quarter, year-over-year. In the Australia business, revenues were up 11% for the quarter, while the residential revenues rose 12% for the quarter, year-over-year.
"The first interest rate cut in four years, combined with expectations of more to come, spurred buyer demand and supported house price growth across the country," said REA Group chief executive officer Owen Wilson.
But REA Group's results provide a larger glimpse into Australia's housing market — most notably the direction of property prices.
"If REA is doing well, that probably suggests that there are more people wanting to buy and sell property. And turnover usually rises when prices are going up," Saul Eslake, a Hobart-based economist, told Australian Broker. "If volumes are rising, then it's more likely than not that prices will go up."
But other signs abound.
On Thursday, ANZ's retail brand revealed that the bank wrote $42 billion in new home loans, an increase of 2%, in fiscal year 2025's first half. Westpac reported that its total lending book rose 5% in its first half, or the six months ending March 2025, year-over-year. Over at National Australia Bank (NAB), home loans were up 3.2%, for the first half, compared with 2024.
The following day, National Australia Bank (NAB) released its Residential Property Tracker for Q1 2025 on Friday. The major expects property prices in Australia's eight capital cities to grow 3% in 2025, and by another 6% in 2026.
Also on Friday, Macquarie's Banking and Financial Services business, which is an Australia-only business, revealed that home loans and business banking book surged 17%, in the 12 months leading up to March 2025. The bank pointed out that much of the demand came from a strong appetite for owner-occupied loans.
Meanwhile, overall mortgage activity is on the rise. Total new loan commitments were up 16%, year-over-year, in the December 2024 quarter, according to the Australian Bureau of Statistics. Owner-occupier loans rose by 12.7%, while investor loans saw a 16.3% uptick.
Adding to the market optimism are reduced interest rates — and the expectation that more are coming later this month as the Reserve Bank of Australia (RBA) meets to discuss monetary policy.
Meanwhile, brokers are reporting increased inquiries, both from first-time buyers and those looking to refinance.
"Hopefully we do see another reduction in rates in May," said Adele Andrews, director and broker at Melbourne-based Australian Property Home Loans. "The data does appear to support another possible reduction, inflationary pressures appear to be easing and I know that this will be a very welcomed announcement from the RBA for every Australian household if it does come through."
