Australia’s property market in 2025 is characterised by high demand, constrained supply, and shifting migration patterns favouring mid-sized capital cities. While Sydney and Melbourne remain the largest housing markets, cities such as Perth, Adelaide, and Brisbane have emerged as high-growth investment destinations, reflecting the dynamic nature of the housing sector.
Houses: Performance Insights Across Cities
The housing market performance has varied significantly across Australia’s capital cities, offering unique opportunities for property investors.
- High Growth Markets:
Perth, Adelaide, and Brisbane have seen double-digit growth in house prices, reflecting strong local economies, increased demand, and affordable entry points. - Mixed or Declining Markets:
In contrast, Melbourne and Hobart have experienced price corrections, presenting potential entry points for investors seeking long-term value.
Here’s a breakdown of how houses performed across capital cities over the past 12 months – as at Jan 2025:
| Capital City | Median House Price | Price Growth % | Rental Yield: | Total Return: % | Total Returns: $ |
| Sydney | $1,686,000 | 2.5% | 2.7% | 5.2% | $87,672 |
| Melbourne | $1,038,000 | -2.9% | 3.2% | 0.3% | $3,144 |
| Brisbane | $1,106,000 | 10.2% | 3.4% | 13.6% | $150,416 |
| Adelaide | $898,000 | 12.5% | 3.5% | 16.0% | $143,680 |
| Perth | $950,000 | 18.7% | 4.0% | 22.7% | $215,650 |
| Canberra | $992,000 | 0.4% | 3.7% | 4.1% | $41,672 |
| Hobart | $748,000 | -0.5% | 4.2% | 3.7% | $27,676 |
| Darwin | $583,000 | 1.4% | 6.0% | 7.4% | $43,142 |
Units: Market Trends and Key Investment Opportunities
Units have shown varied performance, with significant gains in cities like Perth and Brisbane. This creates excellent investment potential for those seeking high-growth properties with attractive rental yields.
- Top Performers:
Perth, Adelaide, and Brisbane continue to outperform in the unit sector, delivering robust returns fueled by high rental demand and limited new construction. - Weaker Markets:
Melbourne and Canberra have seen declines, reflecting higher supply and softer demand, though they may offer value to contrarian investors.
Here’s a breakdown of how units performed across capital cities over the past 12 months – as at Jan 2025:
| Capital City | Median Unit Price | Price Growth % | Rental Yield: | Total Return: % | Total Returns: $ |
| Sydney | $908,000 | 1.8% | 4.0% | 5.8% | $52,664 |
| Melbourne | $651,000 | -3.0% | 4.8% | 1.8% | $11,718 |
| Brisbane | $654,000 | 16.6% | 4.5% | 21.1% | $137,340 |
| Adelaide | $617,000 | 16.9% | 4.7% | 21.6% | $133,272 |
| Perth | $521,000 | 22.7% | 5.5% | 28.2% | $146,922 |
| Canberra | $634,000 | -2.9% | 5.1% | 2.2% | $13,948 |
| Hobart | $581,000 | -1.3% | 4.8% | 3.5% | $20,335 |
| Darwin | $349,000 | -0.5% | 7.9% | 7.4% | $25,826 |
Rental Market Conditions: Tight Supply and Growing Demand
Key Drivers for 2025
- Population Growth: The national population is projected to increase by over 500,000 in 2025. More newly arrived migrants are expected to be drawn to Perth, Adelaide, and Brisbane due to their relative affordability.
- Interest Rates: A Recent Reduction
-
Borrowing Power: The Reserve Bank of Australia (RBA) has reduced the cash rate by 0.25% to 4.10%, marking the first interest rate cut since late 2020. The big 4 banks including CBA, ANZ, NAB and Westpact (and more lenders will follow) have announced they will pass on in full the rate cut to borrowers. This reduction will improve borrowing capacity for investors, making it more feasible to secure financing for property acquisitions.
- Increased Demand: Lower interest rates typically stimulate market activity, potentially leading to increased property demand and price growth, especially in high-demand cities such as Brisbane, Adelaide, and Perth.
-
Affordability & Strategy: Investors who act promptly may benefit from acquiring properties at current prices before heightened demand potentially drives prices upward.
-
Final Thoughts for Investors
- Growth potential in mid-sized capitals – Perth, Adelaide, and Brisbane are demonstrating strong capital growth and rental returns.
- Rental market remains tight – High rental yields and record-low vacancy rates make investment properties in select locations highly attractive.
- Supply constraints will persist – A continued imbalance between housing demand and construction activity is likely to support property price growth in high-demand regions.
-
Interest rates have already begun to decline – The recent RBA rate cut is expected to drive increased investment activity throughout 2025. Economists’ estimates the interest rate would be gradually declining to the neutral level at 3%-3.5% in the next couple of years, which would stimulate more buyer activities and drive up prices in the property market.
Case Study – Extraordinary Growth in Adelaide
Our internal data and research identified Adelaide as a city primed for growth a number of years ago. We undertook intensive due diligence and identified a number of locations and properties that would deliver superior returns for our clients. One such opportunity was a multi-stage townhome development in a lifestyle location. inSynergy advised and assisted clients to secure properties in this development off-plan. These properties have delivered impressive results, with an average capital growth of $300,000 between purchase and settlement (2.5 years). During this time, clients received the capital growth without having any holding costs. Additionally, tenancies were secured upon settlement, providing a remarkable 6% long-term rental yield.
📍 Location: Adelaide, SA
🏠 Property Type: 3 Bed, 3.5 Bath, 1 Car Townhouse
📅 Purchase Date: May 2022
💰 Initial Investment: $915,000
📈 Current Valuation: $1,225,000
Thanks to these achievements, our clients have enhanced cash flow and are now well-positioned to continue expanding their property portfolios.
inSynergy’s expert team can help you capitalise on these trends. Contact us today to discuss your strategy for 2025 and beyond.