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Two-thirds of property professionals expect price rises in 2025

KEY POINTS
- 65% of real estate professionals expect Australian house prices to rise in 2025, with 25% predicting increases of over 5%
- Real estate agents say first-home buyers are older, saving longer, and relying more on financial help from parents as property values outpace wage growth
- With a Federal election approaching, a majority of real estate professionals see boosting housing supply as a top policy priority for the government
Nearly two-thirds of Australian real estate professionals say they expect house prices to rise in 2025, with a quarter saying they expect a lift of 5% or more across the year.
The findings are contained in a new CoreLogic report entitled “Decoding 2025”, which surveyed more than 2,400 real estate agents, banking and finance professionals to gain insights on challenges facing the housing industry, including first-home buyer trends and business priorities.
While Queensland-based businesses were the most optimistic, significantly the survey finds that Melbourne real estate professionals anticipate a potential home price recovery in the Victorian capital, citing affordability and renewed demand.
The details
CoreLogic’s “Decoding 2025” report finds 65% of Australian real estate professionals believe house prices will rise, driven by improving affordability, rising incomes and the potential of several interest rate cuts during the year by the Reserve Bank of Australia.
The central bank has held the cash rate at a 13-year high of 4.35% since November 2023 as it battles to bring high inflation back to its mandated target range of 2-3%.
25% of those surveyed by CoreLogic believe house prices will see gains of more than 5% during 2025.
For the minority with a more pessimistic view, 23% thought prices would hold steady in 2025, 10% thought there would be a mild easing in prices and just 2% predicted losses of more than 5%.
CoreLogic’s Head of Research, Eliza Owen, says economic recovery in late 2024 laid the groundwork for increased buyer activity in the year ahead, and the survey results reflect the outlook shared by CoreLogic staff and other leading economic commentators.
"Improving household savings and easing interest rates are expected to drive demand later in 2025, even as (housing) supply challenges persist," she says.
“Despite some softening in the market in early 2025, it is expected conditions could pick up later in the year alongside lower interest rates, higher real income growth and improved affordability in markets like Melbourne.
“While we do expect values to finish 2025 higher, the pace of increase will probably be softer than the 4.9% achieved in 2024,” Ms Owen says.
Real estate professionals were most optimistic about Queensland, citing the state’s ability to attract internal migrants from elsewhere in Australia, with 70% of respondents forecasting house price growth for the Sunshine State in 2025.
Although it placed last amongst the five biggest states, more than 3/5ths of survey respondents were upbeat about Victoria.
CoreLogic data shows Melbourne’s current median dwelling value of $774,000 is currently 6.4% below its 2022 peak.
However, the data analytics firm found the majority of real estate agents in the Victorian capital anticipate a potential recovery, citing the city’s relative affordability and renewed demand.
First home buyers
“Decoding 2025” also explores the challenges faced by first-home buyers trying to get a foot on the property ladder.
Nearly 9 out of 10 real estate professionals said they had noted first-home buyers are now taking longer to save a deposit for their first home than they were five years ago.
As a result, the survey found 77% of the respondents said they had noticed people buying their first home were generally older.
Nearly 8 out of ten of those surveyed also observed a growing dependence on financial assistance from parents, the so-called “Bank of Mum and Dad”.
This is hardly surprising, considering ABS figures show wages, on average, have grown by about 15% since early 2020, while CoreLogic says home values have soared by around 38% nationally over the same period.
Despite these hurdles, real estate professionals said first-home buyers are adapting by seeking smaller, more affordable properties or are 'rentvesting' - renting in areas close to work and family, while investing in property elsewhere.
Housing an election focus
With a Federal election due in the next few months, two-thirds of respondents (63%) to the CoreLogic “Decoding 2025” report identified increasing supply to address affordability challenges as the top housing policy priority for an incoming government.
“Strategic housing policies targeting faster approvals, increased land release, and incentives for diverse housing types will be critical in addressing supply constraints,” CoreLogic’s Eliza Owen says.
“Clear, supportive measures can instill confidence in buyers and sellers, driving sustained activity across the property sector.”
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