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What the real estate market looks like for 2025
With an impending election, potential rate cuts and shifting rental dynamics, what does the year ahead look like for property investors?
The market is still in transition
According to Executive Manager of Economics at REA Group, Angus Moore, “The property market in 2024 was surprisingly robust with prices up across the year and a pretty busy pace of activity around the country," he says. “We have seen conditions soften a little bit over the back half of the year. As more choices become available for buyers, it has been a little bit less competitive.”
Interest rates remain a key factor
Even though interest rates have risen sharply in recent years, making borrowing more expensive and forcing investors to rethink their strategies, the economy remains relatively robust and unemployment quite low.
“In that environment, we're expecting that housing demand will remain fairly solid,” says Angus.
If rates do end up coming down over the course of the year, what that means is people’s borrowing capacity will strengthen, and as a result, they'll likely have more to spend on the property that they’re wanting.
Rental growth is stalling
For much of 2023 and 2024, rents surged across Australia, making property investment highly attractive.
However, that growth is starting to slow.
It does look like we're starting to see the pace come out of rent growth, and we're expecting that's going to continue in 2025
This doesn’t mean rents will fall, but rather that the rapid increases of previous years may stabilise. This could affect investors who were relying on sharp rent hikes to offset mortgage costs.
Investors are still selling
Despite improving conditions, many investors are still selling.
That's giving owner-occupiers a lot of choice to actually go and buy their property this year.
this trend could present an opportunity for new investors to enter the market at a time when stock levels are higher, and competition for properties may be less intense.
Note:
Content for this article has been sourced from "Realestate.com.au", What could the rest of the 2025 property market look like?