2025 Australian Property Trends
Is 2025 the year to build your property portfolio?
Discover the key trends shaping Australia’s property market in 2025
The Australian property market is constantly evolving, and there’s no exception for 2025. If you’re an Australian Defence Force (ADF) member, an ADFA cadet, or an experienced investor looking to grow your portfolio, understanding the latest property market trends can help you make smart property investment decisions.
This year we’re seeing rising house prices, strong rental demand, and key market shifts. That’s a strong argument towards making 2025 the year to take action.
At Capital Properties, we specialise in helping ADF members leverage their income to secure financial freedom through property investment.
Join our FREE Capital Properties Discovery Session to get started on your investment journey today.
On the go? Here’s 30 seconds of take outs:
- 2025 is seeing rising house prices, strong rental demand & market shifts.
- 65% of Australian real estate agents predict growth.
- Interest rates are stabilising – giving buyers confidence
- There’s still not enough supply to meet demand which means solid rental returns.
- Population growth fuels demand in major cities & key regional hubs.
- Best investment locations – Brisbane, Perth, Adelaide, Canberra & regional NSW/VIC.
Keep reading >>
2025 Australian property market outlook
What’s driving property prices?
CoreLogic recently released their annual report ‘Decoding 2025’ which was gathered from over 2,400 real estate agents and financial professionals across Australia. This report gives a strategic insight into the Australian property market. And the overall picture looks good – showing that the Australian property market has rebounded strongly. In fact, house prices are reaching record highs across many areas.
In this report, the majority of real estate agents (65%) predicted further price increases throughout 2025. Eliza Owen, CoreLogic’s Head of Research, said improved economic conditions in the last months of 2024 have paved the way for increased buyer activity in 2025.
There are several key factors are driving this growth:
Stable interest rates
After a few tumultuous years of increasing interest rate hikes (see the graph below), rates finally seem to be stabilising. The most recent decision in May 2025 by The Reserve Bank of Australia (RBA) to cut the rates has gone a long way to increase buyer confidence.
Source: www.rba.gov.au/chart-pack
Supply & demand imbalance
Limited housing stock is keeping prices high. Despite Government promises for more housing, there’s still not enough supply to meet demand. The most recent budget promised a total commitment of $33 billion to housing. But- even with this significant investment, the market is still experiencing a substantial shortfall.
Several factors are driving this issue, including restrictive housing policies causing development delays, zoning regulations, material shortages, rising construction costs and a stretched workforce.
Government incentives
First-home buyer grants and tax benefits are driving demand. The Government is expanding income and price caps for the Help to Buy scheme to allow 40,000 first home buyers to purchase a home with a lower deposit and a smaller mortgage. Through this scheme, the Commonwealth has committed to contributing up to 40% of the purchase price through a shared equity loan. Increasing income caps from $90,000 to $100,000 for individuals and from $120,000 to $160,000 for joint applicants and single parents.
They’re also rolling out the first two rounds of the $10 billion Housing Australia Future Fund Facility (HAFF), to deliver approximately 18,000 new homes. The HAFF provides loans and grants to increase the supply of social and affordable housing across Australia, including regional, rural and remote areas.
P.S. While you’re here, don’t forget to brush up on your home buyer entitlements for defence members.
Strong rental market
Low vacancy rates = reliable rental returns for investors. A low vacancy rate signals strong rental demand, while a high vacancy rate suggests weaker rental performance. Locations with lower vacancy rates offer better yield potential for investors, as properties are less likely to sit empty between tenants.
In a tight rental market, rising rents can also push up property values, as investors compete for high-performing assets. Over time, this demand contributes to overall property price growth, making investment properties in good locations even more valuable.
Population growth & infrastructure
Australia’s population growth continues to fuel demand for housing, especially in major cities and key regional hubs. According to the Australian Bureau of Statistics (ABS), Australia’s population grew by 1.8% in the last year (reported September 2024). And it’s predicted to continue along a similar trajectory until June 2032. That would bring the population to between 29.2 and 30.8 million people by 2032. Overseas arrivals are expected to outnumber departures, leading to a net migration gain.
Obviously, more people means the need for housing increases, putting upward pressure on both rental demand and property prices.
To service this growing population, we’re seeing increasing development of large-scale infrastructure projects such as new transport links, roads, schools, and hospitals. These new amenities enhance liveability and make those areas more attractive to buyers and investors. That, in turn, will drive long-term property value appreciation.
For ADF members, these conditions provide an excellent opportunity to buy their first investment property or expand an existing property portfolio.
Where should ADF investors buy in 2025?
Choosing the right location is crucial for long-term property investment success. In 2025, there are some areas that stand out due to affordability, strong rental demand, and future capital growth potential. It’s worth checking out our blog post: ‘Hot spot suburbs’ to learn what to look for when choosing an investment location.
Top investment locations for ADF members:
- Brisbane & South-East Queensland – Immigration, new infrastructure projects and the 2032 Olympics preparation are driving strong demand & strong capital growth.
- Perth – Affordable property prices and strong rental yields make it a great choice for Sub $700,000.
- Regional NSW & Victoria – Cities like Newcastle, Wollongong, and Geelong offer affordability to drive renewed demand.
- Adelaide – An affordable alternative to Sydney and Melbourne with steady growth.
- Melbourne – Market stabilising, great affordability, property sales activity increasing & capital growth expected to return.
Need help choosing the right location? Speak with our Capital Properties team today!
2025 is full of opportunities for ADF property investors
The Australian property market is poised for growth in 2025, and ADF members are in a prime position to capitalise on this opportunity. With the right strategy and expert guidance, you can use your disposable income to secure a strong financial future through property investment.
Don’t miss out, book your FREE Capital Properties Discovery Session today and start building your property portfolio!
Note: This information is general advice only. Always conduct your own research and seek independent financial advice before making investment decisions.
