This article is from the Australian Property Journal archive
AUSTRALIAN house prices are set to continue to rise throughout the 2025 financial year, reaching new record highs in multiple capital cities.
According to Domain’s FY25 Price Forecast Report, both house and unit prices will hit new highs in most capital cities in the upcoming year, driven by strong population growth, construction challenges and increased borrowing power.
Perth, Adelaide, Sydney and Brisbane are forecast to see the most significant house price increases to new highs. With the Sunshine Coast, Gold Coast and regional Australia also hit new records.
House prices could surpass $1.7 million in Sydney, with Perth to surpass $800,000 and Adelaide and Brisbane to break the $1 million mark.
For units, Sydney, Brisbane and Adelaide will top price growth. With units in Sydney, Brisbane, Adelaide, Perth, the Gold Coast, Sunshine Coast and regional Australia to hit new highs.
While Melbourne and Canberra are the only cities where unit price growth will beat out house price growth.
“Demand has risen as housing composition changes, demographic shifts, and robust population growth. We have seen an increase in single-person households and a decrease in household size in general (fewer people, on average, living in each household), both amplifying housing demand, further compounded by migration,” Nicola Powell, chief of research and economics at Domain.
“Home building has also struggled to keep up with population growth due to the scarcity of land, weak building approvals, and high construction costs, exacerbating the existing structural undersupply. This will lead to an ongoing limited supply of new homes on the market.”
Powell noted than stage 3 tax cuts coming in on 1 July will boost many Australian’s borrowing capacity and buying power.
“While the continued increase in property values is good news for Australians that own a home, we have to acknowledge that it’s becoming increasingly harder for many Australians trying to get into the property market,” added Powell.
“We urgently need more supply to balance the market and make it more affordable for Australians to own a home. The government has made it clear that housing is a priority focus, but now we need to start seeing all levels of government and industry working together towards a solution.”
“For sellers, with strong demand and limited supply, FY25 could present a favourable time to sell. For buyers, considering the rising prices, it’s important to explore various suburb options using tools such as Domain Suburb Insights and be ready to act swiftly when you find the right property.”
