The national housing market entered a recovery phase during the first quarter of 2025. This rebound reflects improving buyer sentiment, driven by expectations of further interest rate cuts and ongoing imbalances in supply and demand.
Houses: Performance Insights Across Cities
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 remained the markets experiencing the strongest growth in house prices, driven by strong demand and constrained supply. - Mixed or Declining Markets:
Sydney and Melbourne are showing signs of stabilising, mostly due to expected interest rate cuts and improved buyer sentiment.
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 | 1.3% | 2.7% | 4% | $67,440 |
| Melbourne | $1,038,000 | -3.1% | 3.2% | 0.1% | $1,038 |
| Brisbane | $1,106,000 | 8.6% | 3.5% | 12.1% | $133,826 |
| Adelaide | $898,000 | 11.5% | 3.5% | 15.0% | $134,700 |
| Perth | $950,000 | 13.9% | 4.1% | 18% | $171,000 |
| Canberra | $992,000 | -0.5% | 3.8% | 3.3% | $32,736 |
| Hobart | $748,000 | -0.3% | 4.3% | 4% | $29,920 |
| Darwin | $583,000 | 3.3% | 6.2% | 9.5% | $55,385 |
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 | 0.7% | 4.0% | 4.7% | $42,676 |
| Melbourne | $651,000 | -3.2% | 4.8% | 1.6% | $10,416 |
| Brisbane | $654,000 | 15.2% | 4.5% | 19.7% | $128,838 |
| Adelaide | $617,000 | 14.9% | 4.7% | 19.6% | $120,932 |
| Perth | $521,000 | 17.9% | 5.6% | 23.5% | $122,435 |
| Canberra | $634,000 | -2.0% | 5.3% | 3.3% | $20,922 |
| Hobart | $581,000 | -0.1% | 4.8% | 4.7% | $27,307 |
| Darwin | $349,000 | -0.2% | 7.9% | 5.9% | $20,591 |
Rental Market Conditions: Tight Supply and Growing Demand
Looking Ahead
The property market’s trajectory in 2025 will be shaped by interest rate changes, housing supply constraints, and increasing demand. As inflation eases, economists anticipate multiple rate cuts, reducing borrowing costs and stimulating buyer activity.
A critical challenge remains the ongoing housing shortage, especially in Perth, Adelaide, and Brisbane, where available stock has fallen well below historical averages:
- Perth: Housing supply down 50%
- Adelaide: Housing supply down 50%
- Brisbane Hosing supply down 43%
Limited new housing approvals and slowing construction activity are compounding these shortages, putting further pressure on prices and rental affordability. This supply-demand imbalance is expected to sustain strong growth in mid-sized capitals, where competition for properties remains intense.
Final Thoughts for Investors
For investors, the key opportunity lies in high-growth, supply-constrained markets where rising demand continues to push values higher. Acting strategically in 2025 could secure strong capital gains and rental returns.
Case Study – Phenomenal Returns in Perth
We assisted a client in acquiring a competitively priced recently completed apartment in a lifestyle location with convenient access to world-class amenity. Just 11 months after settlement, the property has achieved $65,000 growth, or 16.5% growth in less than a year!
With a long-term tenancy secured and an incredible rental yield of 7.9%, our client experienced an immediate boost in their weekly cash flow. This was the first investment property purchase for this client, this surplus can be used to bolster their financial buffer, mortgage payments, or serve as capital towards another high-yield property in a high-growth, high-yield market.
📍 Location: Perth, WA
🏠 Property Type: 1 Bed, 1 Bath, 1 Car Apartment
📅 Purchase Date: March 2023
💰 Initial Investment: $395,000
📈 Current Valuation: $460,000
The success in this investment has lead to this client expanding their portfolio, purchasing their second property off-the-plan.
inSynergy’s expert team can help you capitalise on these trends. Contact us today to discuss your strategy for 2025 and beyond.