Let’s be honest, the Australian property market has seen some real wild shifts over the past few years and we know just how tricky it can be to keep up.
It’s no surprise that as we move into 2025, there’s plenty on the horizon – more changes and factors that will impact what the year will look like for you as an investor.
From rising interest rates to population trends, supply and demand challenges to regional shifts, having an understanding of what’s coming can help you make informed decisions about your strategy, and plan your next moves in the property market for the upcoming year.
So, let’s dive into what 2025 might hold for property investors shall we?
- Interest rates are changing
One of the biggest factors influencing the market in 2025 is the ongoing impact of interest rates. Up until last year, The Reserve Bank of Australia (RBA) spent a couple of years steadily raising interest rates in an attempt to tackle inflation, making it more expensive to borrow money and slowing the market down. But there are predictions that these rates will drop throughout the course of the year which could make entering the property market or expanding your portfolio much more affordable.
Another factor to consider is that if interest rates drop, it will likely drive demand and activity within the market which could drive prices up, so being strategic with how you navigate these rate changes will be key. - The population is growing and people are moving
Another factor driving the property market in 2025 is our growing population here in Australia. With more people, comes more demand for housing – especially within major cities. If supply can’t keep up (which is a challenge we’ve been facing for a while), prices will likely rise.
In addition, more and more Australians are relocating to states like Queensland, New South Wales and Victoria, with Queensland now being the go-to state, especially for families and retirees looking for a change of pace. In fact, Queensland saw a record influx of over 120,000 people in 2023, and these numbers are only expected to continue into 2025.
The impact? Local property markets are feeling the pressure as demand for housing grows and grows. As a property investor there’s a definite opportunity here to capitalise on areas like Queensland that are experiencing a population boom, especially those that just don’t have the supply to keep up with the demand. - Limited houses, lots of demand
Speaking of supply and demand, a major challenge that is going to follow us from 2024 into 2025 is the ongoing shortage of available properties. New housing approvals are at a 10-year low, we’re facing high construction costs and labour shortages, and it seems the gap between supply and demand is only going to get bigger this year.In cities like Brisbane and Melbourne where demand is well and truly exceeding supply, it only makes sense that property prices are likely to continue rising while too many buyers are competing for not enough listings. For investors, there are some exciting opportunities for you to purchase property in areas where there is tight supply, but it also may be a challenge to find the right investment – so this is where it’s important to have the right people on your side to help you out.
- It’s not all about the cities anymore
Don’t get me wrong, the big cities like Melbourne and Sydney are absolutely still hot spots for property investors, but we are starting to notice some shifts towards more regional areas. Lifestyles have changed a lot from what they were 5, 10 years ago. Since covid and the rise of remote work, people’s priorities have shifted and many are chasing a different, slower type of lifestyle. There are a lot of buyers who are opting for smaller, regional areas that offer more space and a relaxed lifestyle at a far more affordable price.This lends itself to an exciting opportunity for investors to look beyond the big cities, and search for hidden gems within often-very affordable markets. Regional towns within Queensland, Victoria and New South Wales look to have a really strong growth potential, and could be great areas to explore within your investment strategy this year.
So, as you begin planning your investment moves for 2025, it’s important to consider these changes that are both exciting and also offer some challenges.
Sure, there are a ton of opportunities out there to grow your portfolio or even just get started, but if one thing’s clear it’s that it is more important than ever to stay informed about what’s happening in the broader economy, keep an eye on local market trends and stay up-to-date on available financing options. With all of this in mind you’ll be well-positioned for success.
2025 looks like it’s going to be a great year and it’s well and truly one for strategic investment.
Whether you’re a first-time investor or you’re looking to expand your portfolio, we’d love to support you through 2025 with informed strategy, an incredible community and relevant information as you go along your investment journey. Reach out today and let us help you plan your next move.