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As we head towards the end of 2024, let’s take a look at how property markets performed over the last year – and discover what the experts say may lie in store for home prices in 2025.
2024 has been a year of change, with property values and market conditions shifting across many of our state and territory capitals.
In fact, the only constant has been the Reserve Bank of Australia’s cash rate, which has held steady at 4.35% since November 2023.
After a year that saw home values rise nationally by 5.5%, according to CoreLogic, it’s worth looking at what we can expect in the new year.
The Australia-wide picture
November 2024 saw home values rise nationally by a barely perceptible 0.1%.
Technically speaking, it’s the 22nd straight month of growth since January 2023. But realistically, 0.1% hardly qualifies as a cracking pace of growth.
Quite simply, CoreLogic says the market is losing steam, and a downturn is gathering momentum – particularly in Melbourne and Sydney.
That’s good news for buyers who may be able to take advantage of softer price growth in 2025.
However, in a market as large and diverse as Australia, it pays to drill down to local trends.
With this in mind, let’s take a look across our major capital cities.
Queensland
Brisbane home prices have climbed 12.1% over the past year. Can the growth be maintained? Maybe, though perhaps not to the same extent. Domain is predicting price growth ranging from 5-7% for houses, and 7-9% for apartments in 2025.
New South Wales
Sydney is up 3.3% over the past year and likely hit a cycle peak in August. Home values have flattened or fallen ever since, says CoreLogic, with the city’s median home price of $1.2 million proving an affordability challenge. Domain is predicting a 4-6% rise in home values through next year.
Victoria
Melbourne took out the wooden spoon for property price growth in 2024, recording a 2.3% fall in prices over the last 12 months. The new year could bring a change of pace. Domain predicts house values could rise 3-5% in 2025 though apartments are expected to drop by up to 2%.
Australian Capital Territory
Home prices in Canberra have barely budged in 2024, declining by just 0.1% in the past 12 months. Domain is taking an optimistic view, expecting house values to rise by 3-5% next year, while unit values could drop by up to 4%.
Tasmania
Hobart values fell 1% in the year to November, bringing the total falls to 12.1% since the market peaked in March 2022. However, more affordable prices plus generous stamp duty reforms launched in mid-2024 could make 2025 a big year for first home buyers in Tassie.
South Australia
Home values in Adelaide have jumped 14% over the past year. However, CoreLogic says Adelaide’s 2.8% rise in values over the past three months was the lowest since June 2023.
Even so, there may be plenty of steam left in the market, with Domain forecasting a 7-9% rise in prices in 2025.
Western Australia
Perth has seen home prices soar 21% over the past 12 months. But with listings up 33% in November, CoreLogic says the pace of price growth is slowing. Domain is expecting prices to rise by a more modest 8-10% next year – still nothing to sneeze at.
Northern Territory
Prices in Darwin have barely budged this year, mustering up just 0.9% growth over the past 12 months. Next year may be better. SQM Research is predicting home values in Darwin could rise anywhere from 3% to 10% in 2025 depending on interest rates and population growth.
Get to know your borrowing power
A cooler market could be the opportunity you’ve been itching for to buy a property next year.
Call us today if buying a first home, investment property or upgrading your current home is on your radar for 2025 – we’ll help give you a clearer idea of your borrowing power.
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