Australia’s Property Market in 2025: Forecast & Insights

After a period of post-pandemic adjustment, the Australian property market is finally showing signs of stabilising, presenting a window of opportunity for prospective buyers.

Of course, Australia is not one homogenous market, and what’s happening in each local market has its own subtle differences and nuances. To bring you the latest from the front lines, we asked each Frasers Property Australia State Sales & Marketing Director across New South Wales, Victoria, Queensland, and Western Australia to give us their insights and perspective on the Australian real estate market and property investor sentiment.

Their commentary, drawn from real-world observations within Frasers Property communities, paints a picture of a market finding its equilibrium, where informed decisions now can lead to significant benefits in the long-term.

Dino Carulli, NSW Sales & Marketing Director

Here in New South Wales, we started to detect a shift in the market even before the recent rate adjustment. There was a growing sense of confidence among buyers that interest rates had plateaued. The feeling was that while significant drops might not be imminent, the era of rapid increases was likely behind us. So, the more stable circumstances and plenty of choice in the market have seen a shift in sentiment from ‘wait-and-see’ to ‘get-in-now’.

Looking ahead to the rest of 2025, I think it’ll be more of a balanced market than a boom. If we see a couple more rate cuts by Christmas, people’s borrowing power starts to look vastly improved. Eventually stock levels will come back into equilibrium and potentially even become constrained again. That will put upward pressure on prices. For those who have their finances in order, now really does feel like the time to make a move.

Across different market segments within our Frasers Property communities, we're seeing strong interest from first home buyers at our Ed.Square development. The availability of one to three-bedroom townhomes in the $700,000 to $1.2 million range, within an established community offering great transport and retail amenities, is proving very attractive.

Investors are showing keen interest in Midtown MacPark, where the supply of new apartments is relatively limited. The university and employment hub, plus the new Metro, makes Macquarie Park a great place to invest. And at The Waterfront, Shell Cove we’re seeing a real uptick of activity from upgraders and downsizers, particularly now that we have the most diverse range of product that we’ve had in some time.

Brent Hill, VIC Sales & Marketing Director

Historically, the property markets in Melbourne and Sydney have tended to move in tandem. Unfortunately, the Victorian market experienced a sharper contraction following the pandemic and a far slower recovery, which really impacted the property market. It amazes me to say it, but Victoria now stands as the sixth most affordable capital city market in Australia, with only Darwin and Hobart offering lower medians!

We were still seeing prices fall last quarter, but this quarter we’re seeing some modest growth again. This tells us that we’ve likely been to the bottom of the cycle and the property market outlook is starting to turn positive again. When you consider this alongside Victoria's strong migration inflows and projections that Melbourne will become Australia's most populous capital city within the next four years, the potential for future growth becomes very clear.

We know from historical trends that new migrants typically rent for a period of two to four years before purchasing property. Given the significant waves of migration in recent years, we anticipate a surge in buyer demand from this demographic over the next couple of years. Savvy investors are already recognising this potential in Victoria and are actively entering the market. Over the past few months, we've seen a notable increase in investment activity from buyers based in South East Queensland and New South Wales, who are looking to capitalise on anticipated capital growth and attractive rental yields in Melbourne.

The current sweet spot in the Victorian market appears to be in the $550,000 to $700,000 range for 3 to 4-bedroom townhomes within well-connected, growing communities. These properties offer good local amenities and represent low-maintenance investment opportunities.

There's no doubt that market momentum has shifted positively since the start of the year. Our online enquiry levels have doubled, and our walk-in traffic has tripled – a strong indication that potential buyers are serious and ready to transact.

Luciana Scofield, WA Sales & Marketing Director

Here in Western Australia, affordability is the primary driver right now. The recent interest rate adjustment provided some relief, particularly for first home buyers, but I think we’ll need to see a couple more rate cuts to truly offset the significant price growth we've experienced due to a fundamental lack of housing stock. Our mining sector remains very strong, and interstate migration continues to fuel demand and intense competition, especially for land.

These price pressures have led to a notable shift in buyer preferences. We're seeing a greater acceptance of smaller lot sizes, cottage lots, and townhomes than ever before. For many, the priority is transitioning from renting to owning, and they are willing to start with a more affordable, smaller property with the intention of upgrading over time.

Historically, the WA market has often operated on a counter-cycle to the eastern states, experiencing booms when the east coast faces downturns and vice versa. However, looking ahead, I don't think we’ll see significant price drops in WA over the short-term, even as the Melbourne market recovers. The underlying reality is that while demand remains strong and stock remains tight, we will continue to see upward pressure on prices, albeit at a more moderate pace.

For those who have been waiting for the 'right' moment to buy in WA, the current property market conditions are likely as favourable as they will be for some time.

Mary McCabe-Gray, QLD Sales & Marketing Director

The recent interest rate adjustment in Queensland was a tangible turning point in market sentiment. Prior to that, many potential buyers were adopting a cautious 'wait-and-see' approach. The rate cut seemed to inject a renewed sense of confidence into the real estate market, signalling that the time was right to make a move.

We've seen this increased activity across every segment of the market. At the more premium upgrader level, we have a very healthy level of interest in new homes at The Quarry in the $1.5 million to $3 million price range. These are people who have often realised substantial gains from their existing homes in established suburban areas or larger acreage properties and are now seeking high-quality, lifestyle-oriented living closer to the city.

Meanwhile, demand at our Brookhaven community often outpaces our ability to keep up with it. This is a neighbourhood that has gone from strength to strength over the years with residents becoming our biggest advocates. Supply has been fairly constrained however, and as such we’re seeing steady growth in interest in our New Beith project, expected to launch early next year. That will open up another 2000 or so lots in a fast-growing corridor.

Looking ahead for the remainder of 2025 in Brisbane, I think we’ll see a period of steady progress in the property market. The primary challenge remains the limited supply of new land coming to market, which will push prices higher. Streamlining development approval processes and reducing bureaucratic hurdles would be beneficial for affordability and the entire housing market.

In the longer term, the outlook for Brisbane remains exceptionally positive. The upcoming 2032 Olympic Games are a major catalyst, driving substantial infrastructure investment across the state. These projects will not only benefit Queensland in the lead-up to and during the Games but will also leave a lasting positive legacy for years to come. There’s no question in my mind that Queensland remains a growth state that will continue to attract strong property investor sentiment.