Despite ongoing economic headwinds, Raine & Horne Executive Chairman Mr Angus Raine is confident about the future of Australia's $11 trillion property market in 2025.

Mr Raine forecasts solid growth in 2025, underpinned by an anticipated pre-Easter rate cut that he believes will turbocharge the nation's favorite asset class, cementing its resilience and appeal.

Mr Raine highlighted the market’s resilience. National home values rose 5.5% year-on-year in November 2024, marking 22 months of consecutive growth and despite persistently high interest rates.

“Demand remains strong, but the supply of properties is constrained by factors such as government red tape, a shortage of skilled tradespeople, and high building costs,” Mr Raine said.

“This scarcity, combined with sustained buyer demand, is likely to support property growth similar to 2024 into 2025 with growth of 4-6% now in prospect.”

Looking ahead, Mr Raine noted that easing inflation and slowing economic growth could encourage the Reserve Bank of Australia (RBA) to cut interest rates as early as February 2025, ahead of the autumn selling season and the federal election anticipated by May.

“An early rate cut in 2025 could be the magic catalyst for buyers, finally putting the interest rate genie back in its bottle and sparking them back into property buying mode.

“A rate cut either in February or early April could also set the stage for a strong autumn selling season.”

Sydney property market set for a strong year

In Sydney, where property values grew by 3.3% in the year to 30 November, slightly outpacing regional NSW's 3.2% growth, Mr Raine remains optimistic about the year ahead.

“Our data shows that while buyer demand is softer than earlier in the year, savvy buyers are still securing quality properties at fair prices,” Mr Raine noted. He added that listings in NSW were about 10% higher in November 2024 compared to the same period last year according to data from Raine & Horne.

Mr Raine identified several NSW suburbs and towns to watch in 2025:

• West Pymble: West Pymble offers a more affordable option within Sydney's prestigious North Shore, with a median house price just over $2.85 million. The nearest metro station, Macquarie University Station, is just a 12-minute walk away.
• Helensburgh: Enjoy a peaceful coastal lifestyle just 50 minutes from Sydney, with the added appeal of a $1.25 million price tag.
• Dubbo: With 56,558 residents, this major regional hub supports 26,650 jobs and generates $9.528 billion annually. Key industries include healthcare, construction, retail, education, and manufacturing. With a median house price of $580,000, Dubbo is an appealing place to live.

Strategic shifts, interest rates, and key buyer hotspots in Victoria

In Victoria, Mr Randolph Clements, Managing Director of Raine & Horne Victoria, believes local and international factors will shape the state’s property market recovery in 2025.

“Donald Trump’s proposed 60% tariffs on China could drive strategic shifts. China’s closer ties with nations like Australia may lower product prices, influence trade, potentially drive up inflation, and complicate rate cuts by the RBA,” Mr Clements said.

“Even if the RBA cuts in February, the impact won’t be felt until April or May.” Mr Clements predicts significant monetary policy changes will occur post-Federal Election, with the potential for a cumulative 75-basis-point rate cut in 2025.

Victoria’s passion for real estate, Mr Clements said, will bring buyers back as rates fall. “Buyers will queue at Saturday open homes, ready to compete for properties.”

In November 2024, listings rose just 2% year-on-year, appraisals dropped 11.5%, but open home attendance surged over 10% compared to late spring 2023, according to data from Raine & Horne.

“Victoria’s affordability, with Melbourne’s median dwelling value at $776,949, positions it for a robust recovery,” Mr Clements said. “Now is the time to buy rather than wait, making this a key moment for buyers.”

Mr Clements noted several property hotspots for 2025.

• Canterbury: With a prestigious reputation, leafy streetscapes, and high-quality housing stock, Canterbury is far removed from being an entry-level market. However, buyers won’t find a better opportunity than now to enter this exclusive area and potentially save large sums.
• Sunbury/ Dandenong/Cranbourne/Clyde: These satellite suburbs present an excellent opportunity for buyers with a $650,000 budget, especially with rental growth surging 10.6% over the past year.

Queensland property poised for continued growth in 2025

Brisbane's real estate market closed the year with annual growth around 12%, and many experts are forecasting another solid year ahead, with Raine & Horne projecting growth of 5-8% in 2025.

Mr Gary Hassett, Queensland State Manager, Raine & Horne, said, “Brisbane and regional Queensland enjoyed good growth in 2024, and we don’t expect any slowdown moving into the new year.

“We are seeing more green shoots of activity, particularly from vendors seeking to benefit from good demand and decent growth.

“However, the number of listings is still below demand, as we see plenty of groups at our open for inspections. This imbalance between supply and demand will also help underpin price growth in 2025.”

In Brisbane, the $3.6 billion Queen’s Wharf Brisbane Integrated Resort Development[ii] will attract workers to inner Brisbane’s apartment markets, making it a market to watch, said Mr Hassett. “This will drive up demand for rentals, which is excellent news for landlords and for investors considering investing in Inner Brisbane.

Outside the capital, Mr Hassett says Toowoomba will continue to attract owner-occupiers and investors. “The median house price in Toowoomba is under $600,000, which is attractive because it is not far from Brisbane, it has its own airport, is relatively liquid, and easy access to Brisbane, Gold Coast, and the Sunshine Coast.”

Adelaide’s growing appeal for professionals

Adelaide’s affordability, lifestyle, and connectivity make it a leading choice for professionals and investors, said Mr James Trimble, General Manager SA & WA, Raine & Horne, who is tipping values to grow by 6-7% in 2025.

“Adelaide’s proximity to major capitals is a game changer,” said Mr Trimble. “You can reach Melbourne in 60 minutes or Sydney in 90, making it ideal for ‘professional FIFO’ workers—those in banking, tech, or other industries seeking a better quality of life without career sacrifices.

“The digital revolution, fuelled by the NBN rollout and COVID-19, has also positioned Adelaide as a base for professionals working remotely for Sydney or Melbourne employers.”

Adelaide’s median house prices are 40% cheaper than Sydney’s, and school fees are half the cost, offering significant savings for families.

“Traditional areas like Burnside and Parkside remain sought after, while new developments north and south of the city offer great entry-level opportunities,” Mr Trimble added.

Perth market offers outstanding value for investors and relocators

Perth continues to stand out as a prime real estate market in Australia with its spectacular annual growth of 21%, offering significant value for investors and an exceptional lifestyle that attracts both interstate and international relocators, according to Mr Trimble, who believes the WA capital’s real estate market is in for another robust year in 2025 with growth of 8-10%.

“There’s still great value to be found in the Perth market,” said Mr Trimble. “It’s one of the strongest markets in Australia right now, with opportunities for value growth and a lifestyle that appeals to a wide range of buyers —especially for those familiar with the eastern states.

“For instance, Mandurah with a median house price of $526,000 offers a lifestyle that mirrors the Central Coast in New South Wales but not its price tag, while Albany offers a coastal charm comparable to some of the best spots along the NSW coast.”

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