Current Trends in the Australian Property Market (2025)

The Australian property market in 2025 is characterized by moderate to strong growth in housing values, primarily driven by high demand in capital cities, low supply levels, and government initiatives supporting first-time homebuyers. National dwelling values saw a 0.8% increase in September 2025, the most significant monthly gain since October 2023, and a 2.2% rise over the quarter.

Key drivers of the current market include:

• Low Supply and High Demand: A significant shortage of available properties, with national listings at historic lows, is fueling price increases.

• Capital Cities Leading Growth: Cities like Sydney, Melbourne, Brisbane, and Perth are outperforming regional areas, with Perth and Brisbane showing the strongest quarterly growth.

• Increased Buyer Competition: Government schemes, such as the expanded Home Deposit Guarantee, have intensified competition among first-home buyers.

In response to these conditions, many homeowners are choosing to renovate or upgrade their existing properties by leveraging home equity, rather than entering the highly competitive market. While property prices continue to rise, there has been a slight decline in sales volumes and variable auction clearance rates across different cities.

The rental market is also under pressure, with sharp increases in median rents and low vacancy rates causing financial strain for many households. As of August 2025, the total value of Australian residential real estate reached approximately $11.7 trillion. With easing interest rates and improved buyer sentiment, the market is poised for a potentially strong spring selling season.