2025 Australian Property Market Check-In: What’s Really Happening?

2025 Australian Property Market Check-In: What’s Really Happening?

We’re already five months into 2025 — and if you’ve been keeping one eye on the property market, you’ll know it’s been far from quiet.

Earlier this year, KPMG released its highly anticipated Residential Property Market Outlook for 2025, packed with predictions about house prices, rental growth and economic drivers. Now, as we approach the halfway point of the year, it’s the perfect time to check in on how those forecasts are stacking up — and whether the market is really living up to the hype.

The good news? There’s still plenty happening behind the scenes — and for savvy buyers, opportunities are definitely still out there.

Who Is KPMG’s Property Outlook — and Why Does It Matter?

KPMG is one of the world’s leading advisory firms, known for its in-depth economic and property market forecasting. Their Residential Property Market Outlook draws on national housing, finance and demographic data — and is widely trusted by investors, banks and industry professionals.

What KPMG Predicted for 2025

• National house prices to grow by 3.3%.
• Unit prices to rise by 4.6%, slightly outpacing houses due to affordability pressures.
• Price growth to accelerate in the second half of 2025, driven by expected interest rate cuts.
• Rental growth to ease slightly, but remain above long-term averages.
• Limited housing supply and strong population growth to continue supporting prices.

How the Market Is Tracking So Far

According to the latest data from CoreLogic and Your Mortgage, house prices are broadly in line with KPMG’s projections. As of April 2025, the national median house price sits at $885,361 — steady growth that supports the 3.3% annual increase forecasted earlier in the year.

Affordability pressures are certainly playing a role in some buyers leaning toward units. However, detached houses remain highly sought-after in markets like Brisbane, Perth and Adelaide, where strong capital gains in 2024 are continuing into 2025.

Rental Conditions Remain Strong

KPMG’s expectations for the rental market have largely held up too. Growth has moderated from the rapid increases of 2023 and early 2024, but vacancy rates remain low and rental yields continue to offer strong returns for investors.

While many tenants are feeling the pinch, investors with the right properties in the right markets are still reaping the benefits of consistent demand and limited supply.

What About Interest Rates?

As predicted, the Reserve Bank of Australia has held off on rate cuts — but signs point to change later in the year. This delay has meant some buyers remain cautious, but with potential rate relief on the horizon, the second half of 2025 could bring renewed momentum.

Our Mid-Year Takeaways

• House prices are holding firm, closely tracking early forecasts.
• Houses remain the premium asset class for both homeowners and investors.
• Rental yields are attractive, and vacancy rates remain historically low.
• Rate cuts are expected later this year, which could further lift activity.
• Stock remains tight, meaning competition for quality properties is still strong.
• The upcoming expansion of the First Home Buyer Guarantee (from January 2026) is already influencing some buyer behaviour. With no annual cap and just a 5% deposit required, the scheme is expected to increase demand in early 2026 — prompting some buyers to act now to beat the rush and avoid rising competition.

Thinking of Buying in 2025?

Despite the headlines, this is not a “soft” market — it’s a selective one. The best opportunities are still out there, especially for buyers who are strategic, prepared and supported by expert guidance.

If you’re looking to buy this year:

• Be strategic: Not all suburbs or states are moving at the same pace.
• Be selective: Buying the right asset is more important than ever.
• Be prepared: Competition is still strong for high-quality properties.
• Don’t go it alone: A smart, research-driven strategy will always outperform guesswork.

If you’d like to view the full KPMG Residential Property Market Outlook – January 2025, you can access it here.

Thinking about making your next move? Whether it’s a home or investment, we’ll help you buy with confidence — and strategy.

Reach out to the team at Sharp Property Buyers today.