A current report by Domain anticipates that real estate costs in various areas of the country, especially in Perth, Adelaide, Brisbane, and Sydney, are expected to see substantial increases in the upcoming financial

Throughout the combined capitals, house rates are tipped to increase by 4 to 7 per cent, while system prices are prepared for to grow by 3 to 5 per cent.

By the end of the 2025 fiscal year, the median home price will have exceeded $1.7 million in Sydney and $800,000 in Perth, according to the Domain Forecast Report. Adelaide and Brisbane will be on the cusp of breaking the $1 million median home price, if they have not already strike seven figures.

The housing market in the Gold Coast is anticipated to reach new highs, with costs predicted to increase by 3 to 6 percent, while the Sunshine Coast is prepared for to see a rise of 2 to 5 percent. Dr. Nicola Powell, the primary economist at Domain, noted that the anticipated growth rates are reasonably moderate in most cities compared to previous strong upward patterns. She mentioned that costs are still increasing, albeit at a slower than in the previous financial. The cities of Perth and Adelaide are exceptions to this trend, with Adelaide halted, and Perth revealing no signs of decreasing.

Rental rates for houses are anticipated to increase in the next year, reaching all-time highs in Sydney, Brisbane, Adelaide, Perth, the Gold Coast, and the Sunshine Coast.

Regional units are slated for a total price boost of 3 to 5 percent, which "says a lot about price in terms of purchasers being guided towards more economical home types", Powell said.
Melbourne's home market remains an outlier, with anticipated moderate yearly growth of as much as 2 per cent for homes. This will leave the median house rate at between $1.03 million and $1.05 million, marking the slowest and most irregular healing in the city's history.

The Melbourne housing market experienced an extended slump from 2022 to 2023, with the average home rate dropping by 6.3% - a significant $69,209 reduction - over a duration of five consecutive quarters. According to Powell, even with a positive 2% development projection, the city's house rates will only manage to recover about half of their losses.
Canberra home prices are also anticipated to stay in recovery, although the forecast growth is moderate at 0 to 4 per cent.

"The nation's capital has actually had a hard time to move into an established recovery and will follow a likewise sluggish trajectory," Powell said.

With more cost increases on the horizon, the report is not motivating news for those trying to save for a deposit.

"It implies various things for various kinds of buyers," Powell said. "If you're a present resident, prices are expected to rise so there is that aspect that the longer you leave it, the more equity you may have. Whereas if you're a first-home purchaser, it might imply you need to conserve more."

Australia's real estate market remains under significant stress as homes continue to face affordability and serviceability limits amidst the cost-of-living crisis, increased by continual high interest rates.

The Reserve Bank of Australia has actually kept the main money rate at a decade-high of 4.35 per cent since late last year.

According to the Domain report, the minimal schedule of brand-new homes will stay the main factor influencing property values in the future. This is because of an extended scarcity of buildable land, sluggish construction permit issuance, and elevated building costs, which have restricted real estate supply for a prolonged duration.

A silver lining for potential homebuyers is that the upcoming stage 3 tax reductions will put more money in people's pockets, thereby increasing their ability to take out loans and ultimately, their purchasing power nationwide.

According to Powell, the real estate market in Australia might get an extra increase, although this might be reversed by a reduction in the buying power of customers, as the expense of living boosts at a quicker rate than incomes. Powell alerted that if wage development stays stagnant, it will result in an ongoing battle for cost and a subsequent reduction in demand.

Across rural and outlying areas of Australia, the value of homes and apartments is anticipated to increase at a steady pace over the coming year, with the forecast differing from one state to another.

"At the same time, a growing population propped up by strong migration continues to be the wind in the sail of property price growth," Powell stated.

The current overhaul of the migration system could cause a drop in need for local realty, with the intro of a new stream of competent visas to eliminate the incentive for migrants to live in a regional area for 2 to 3 years on getting in the nation.
This will mean that "an even greater percentage of migrants will flock to cities searching for much better job prospects, thus dampening need in the local sectors", Powell stated.

According to her, outlying areas adjacent to city centers would maintain their appeal for individuals who can no longer afford to live in the city, and would likely experience a rise in popularity as a result.