Property Market Update – May 2025
We would like to provide you with an update on recent property market developments that may interest you.
Property Market update as of May 2025
National Market Overview
Australia’s housing market continues its upward trajectory. In fact, national home values reached a new peak in April 2025. Cotality’s Home Value Index recorded a 0.3% month-on-month increase, bringing the national average to A$825,349. Moreover, strong immigration and limited housing supply continue to drive this growth.
Perth and Brisbane continue to lead in annual growth. Both cities benefit from strong local economies and steady interstate migration.
Regional Market Trends
Regional areas are experiencing varied growth patterns. For instance, regional Queensland saw a 73.2% increase in dwelling values over the past five years. In contrast, regional Victoria declined 6.9% from its peak in May 2022.
Rental Market Overview
The rental market remains tight across Australia. As a result, the national vacancy rate fell to 1.1% in March 2025, down from 1.5% in January.
Vacancy Rates by Capital City (March 2025)
– Sydney: 1.3%
– Melbourne: 1.5%
– Brisbane: 0.9%
– Perth: 0.6%
– Adelaide: 0.6%
– Canberra: 1.5%
– Darwin: 0.8%
– Hobart: 0.5%
Nationally, rents increased by 5.1% over the past year. Houses rose by 5.3% while units grew by 4.8%.
Median Weekly Rents
| City | Houses | Annual Change | Units | Annual Change |
| Sydney | $1,059.81 | +2.6% | $712.97 | +2.2% |
| Melbourne | $756.62 | +2.2% | $569.67 | +2.0% |
| Brisbane | $756.61 | +5.6% | $596.93 | +3.5% |
| Adelaide | $668.80 | +6.1% | $525.88 | +12.6% |
| Perth | $830.73 | +6.3% | $645.36 | +8.6% |
Government Initiatives
The Australian Labor Party has proposed several measures to address housing affordability. These include:
- 5% Deposit Scheme: The government guarantees first home buyers can purchase with just a 5% deposit.
- $10 Billion Housing Investment: The government will fund construction of 100,000 homes exclusively for first home buyers.
Additionally, the government has instructed lenders to disregard student debts when assessing mortgage serviceability. As a result, this will lift borrowing capacity for many Australians.
Furthermore, the RBA is forecasting a 1.0% cut to the official cash rate by end of 2025, taking it to 3.10%. This reduction is expected to stimulate the housing market further.
Market Outlook
The Australian property market update for May 2025 points to continued modest growth throughout the year. Strong demand and limited supply underpin this outlook. However, affordability constraints and global economic uncertainties may temper the pace of growth.
The rental market is also likely to remain tight. Low vacancies and steady rent increases will persist, particularly in cities with strong population growth.
Moreover, the NAB Residential Property Index spiked to +40 in March 2025. This follows three consecutive quarters of decline. The surge reflects growing confidence, driven by improved economic conditions and lower interest rates.
General Advice Warning
This information is general in nature only. It does not consider your personal objectives, financial situation or needs. Nothing here constitutes financial, investment or legal advice. Before acting, consider whether this information suits your circumstances. To the maximum extent permitted by law, Forward Path Advisory Pty Ltd, Joel Cleary and Radz Je disclaim all liability for any loss arising from reliance on this content. Past performance is not an indicator of future performance. Please seek professional advice before making any financial decisions.
How We Can Help
Navigating Australia’s evolving property market requires informed decisions. At Forward Path Advisory, we help you understand how these market trends affect your financial situation and investment strategy. Therefore, whether you are buying, selling or investing, contact our team today for tailored advice aligned to your long-term financial goals.
