The property market is heating up with forecasts for 2025 starting to be released, and SQM Research’s Boom & Bust Report by Louis Christopher remains one of the most anticipated analyses in the industry. During our latest episode of The Property Frontline Market Watch – Scott and I reviewed the Boom Bust report to look at Louis Christopher’s projections, compared them with other market predictions, and explored how these insights can guide smart property decisions for home buyers and investors.
2023 and 2024 Forecast Review: How Accurate Was SQM?
Louis Christopher has been publishing the SQM Research Boom Bust reports for more than seven years and he has consistently been one of the most reliable property market forecasters over that time – certainly much more accurate than the economists form the major banks.
Scott and I started the review with a quick comparison of the Boom Bust forecasts (which are released in November each year) and considered this information against the property market actual results produced at the end of the year. While some of Louis’ 2023 and 2024 predictions were conservative, they were largely directionally accurate:
- 2023 Highlights: Key growth cities like Perth, Brisbane, and Sydney outperformed expectations, with house prices rising significantly. Perth saw a 15.6% increase, outpacing the 4–8% forecast.
- 2024 Results (to October year on year): Perth again surged by 22%, well above the predicted 5–9%. Meanwhile, Sydney’s 4% growth deviated from the expected slight contraction.
This track record underscores SQM’s cautious but data-driven approach, which contrasts with overly pessimistic projections from some banks.
Key Forecasts for 2025: Base Case Highlights
SQM Research’s 2025 forecast incorporates several scenarios, with the base case assuming a slight reduction in interest rates mid-year, continued strong migration, and stable inflation. Here’s what they predict:
- Perth: Leading the pack with potential growth of 14–19%, driven by low vacancy rates, infrastructure spending, and a robust state economy.
- Brisbane: Following suit with 9–14% growth, although slowing rental growth signals some market normalization.
- Adelaide: Projected to rise 8–13%, supported by strong demand.
- Sydney and Melbourne: Expected to decline by 1–5%, as high interest rates take a toll, particularly in the first half of the year.
- National Average: Modest growth of 1–4% across capital cities.
What Makes SQM Different?
Louis Christopher’s methodology sets SQM apart. His scenario-based forecasting considers multiple variables, such as migration, interest rate changes, and policy shifts, providing nuanced insights. Unlike others, he avoids developer influence, ensuring unbiased analysis. A standout from his 2023 forecast was identifying migration as a key driver, which many major banks overlooked. This forward-thinking approach continues into 2025, where population growth remains central to his predictions.
Comparing Major Banks’ Predictions
How do SQM’s forecasts stack up against banks like NAB and ANZ?
- Perth and Brisbane: While SQM anticipates robust growth, banks are more conservative, forecasting 5–8%.
- Sydney and Melbourne: SQM foresees slight declines, diverging from banks that predict modest growth in these markets.
This contrast highlights SQM’s reliance on real-time data and also a deeper understanding of the property market, capturing trends that banks may miss.
Influencing Factors for 2025
Several external factors could impact market performance in 2025:
- Interest Rates: Banks are already cutting rates out of cycle to attract borrowers, effectively easing conditions for buyers even without Reserve Bank of Australia (RBA) intervention.
- Migration: Population growth continues to pressure housing supply, especially if policies prioritize the wrong type of skilled workers. The construction industry is consistently calling out for more construction specialists to provide the skills needed to meet Australia’s slow delivery of new dwellings.
- Federal Election: Housing policy will be a hot topic, with Liberals focusing on infrastructure and funding supply, while Labor’s Help to Buy scheme is unlikely to significantly influence market dynamics.
Practical Takeaways for Buyers and Investors
- Think Long Term: While 2025 forecasts are valuable, property is a medium-to-long-term game. Focus on areas with multiple growth drivers and look further than just ‘the numbers’.
- Suburb-Level Insights: City-wide averages mask granular opportunities. For example, within Sydney’s 658 suburbs, market dynamics vary significantly between property types and locations.
- Understand the Market Cycle: Current trends like interest rate cuts and reduced rental growth in some markets suggest we’re entering a period of stabilization, which could present buying opportunities.
Conclusion: A Year to be Strategic
2025 promises to be a dynamic year for Australia’s property market. With SQM Research leading the charge in accurate and unbiased forecasting, buyers and investors can arm themselves with valuable insights to make smarter decisions. Whether it’s capitalizing on Perth’s booming market or navigating Melbourne’s decline, understanding the nuances will be key.
Stay tuned for updates as new data emerges, and remember: strategic, informed decisions will always outperform speculation.
Watch the full discussion here.
About the author
Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline. She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics. She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.
Follow us on facebook.com/ThePropertyFrontline for regular updates, or book in for a strategy session to discuss your property questions.
Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.
