Perth is forecasted to dominate Australia’s housing market in 2025, with dwelling prices expected to rise by 14–19%, according to SQM Research’s Christopher’s Housing Boom and Bust Report 2025.
While the national market is anticipated to grow modestly by 1–4% on average, Perth’s momentum contrasts sharply with Sydney and Melbourne, which are projected to experience declines of 1–5%.
Louis Christopher (pictured above), managing director of SQM Research, highlighted the mixed outlook.
“For 2025, we anticipate continued growth in resource-rich markets like Perth, Brisbane, and Adelaide, while overvalued markets like Sydney, Melbourne, and Canberra are likely to record price falls in the early part of the year,” Christopher said.
A potential interest rate cut of 0.25–0.50% by mid-2025 is expected to play a pivotal role in shaping market activity. Reduced borrowing costs could reinvigorate buyer demand, particularly in markets currently experiencing a downturn.
“Once rate cuts occur, Sydney and Melbourne are likely to see a swift recovery in demand,” Christopher said.
Brisbane and Adelaide are also expected to outperform, with price increases of 9–14% and 5–8%, respectively. Robust population growth and limited housing supply are driving these markets, while Brisbane continues to benefit from interstate migration and anticipation surrounding the 2032 Olympics.
Sydney and Melbourne remain under pressure due to high affordability barriers and economic headwinds. Christopher warned that without rate cuts, recovery in these markets may not materialize in 2025.
National contingencies shape the SQM Research’s outlook
SQM Research’s forecast hinges on three key contingencies:
If these conditions falter, housing markets in Sydney, Melbourne, and Canberra could face prolonged declines, while Perth’s strength might remain resilient.
Christopher emphasised that current conditions present a potential opportunity for buyers, particularly in Sydney and Melbourne.
“There’s a good window for buyers in our largest capital cities, but if rate cuts don’t occur, recovery is unlikely before 2026,” he said.
Brisbane is expected to continue outperforming the national market through to the 2032 Olympics, while Perth’s reliance on commodity markets introduces some vulnerability.
Canberra and Hobart are forecasted to see the largest declines, with falls of up to 6%, SQM Research reported.
For detailed insights, visit the SQM Research website.
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