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, with national home values reaching a new peak in April 2025. Cotality’s Home Value Index reported a 0.3% month-on-month increase, bringing the national average to A$825,349. This growth is attributed to strong immigration and limited housing supply.
Perth and Brisbane continue to lead in annual growth, driven by strong local economies and interstate migration.
Regional Market Trends
Regional areas are experiencing varied growth patterns. For instance, regional Queensland has seen a 73.2% increase in dwelling values over the past five years. However, some regions like regional Victoria have experienced a 6.9% decline from their peak in May 2022.
Rental Market Overview
The rental market remains tight across Australia. As of March 2025, the national vacancy rate decreased to 1.1%, 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 have increased by 5.1% over the past year, with houses rising by 5.3% and units 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:
- 5% Deposit Scheme: A government guarantee allowing first home buyers to purchase a property with a 5% deposit.
- $10 Billion Housing Investment: An investment aimed at constructing 100,000 homes exclusively for first home buyers.
Additionally, the government has instructed lenders to disregard student debts when assessing mortgage serviceability, which will lift borrowing capacity.
The Reserve Bank of Australia (RBA) is also forecasted to cut the official cash rate by 1.0% by the end of 2025, taking it to 3.10%. This anticipated reduction is expected to further stimulate the housing market.
Market Outlook
The Australian property market is expected to continue its modest growth throughout 2025, supported by strong demand and limited supply. However, affordability constraints and global economic uncertainties may temper the pace of growth. The rental market is likely to remain tight, with low vacancies and steady rent increases, particularly in cities with strong population growth and limited housing supply.
The NAB Residential Property Index recorded a significant spike in March 2025, reaching +40 and indicating strong optimism in the housing market. This surge comes after three consecutive quarters of decline and reflects growing confidence driven by improved economic conditions and lower interest rates.
Advice Warnings & Disclaimers.
This information is intended to provide general information only and has been prepared without considering any particular person’s objectives, financial situation or needs. Any general advice contained within or given during this presentation (whether orally or in writing) does not consider your objectives, financial situation or needs. Nothing in this presentation is intended to be investment, financial advice or a recommendation to invest in a financial product. Before acting on such information, you should consider the appropriateness of the information having regard to your personal objectives, financial situation or needs. To the maximum extent permitted by law, we (Forward Path Advisory Pty Ltd), Joel Cleary & Rathakrishna Jeyabalasingam (Rads Je) disclaim all liability and responsibility for any direct or indirect loss or damage which may be suffered as a result of relying on anything in this podcast, including any forward-looking statements. Past performance is not an indication of future performance. In particular, you should obtain professional advice before acting on the information contained in this presentation.
Navigating Australia’s evolving property market requires informed financial decisions. At Forward Path Advisory, we can help you understand how these market trends affect your personal financial situation and investment strategy. Whether you’re considering buying, selling, or investing in this delicately balanced market, contact our team today for tailored advice that aligns with your long-term financial goals.
