With the market on the move, sales performance for property Australia-wide is telling a very interesting story.
In the latest episode of Market Watch, Scott and I conducted our usual deep dive into the data and also covered off where interest rates could head after the latest RBA announcement. In addition, by special request, we took a look at the rental market and how that market is changing.
Watch the episode by clicking here or read the summary below.
Property Prices: A Tale of Multi-directional Markets
Sydney and Melbourne: A January Slowdown
If you were hoping for big gains in the Sydney and Melbourne markets, January was not your month. Sales volumes were low due to the holiday season, and the price data reflected some weakness, though not the dramatic dips the media has been hyping –
- Sydney: Prices dipped across the board, with CoreLogic recording a 0.4% decline, SQM Research showing -0.2%, and PropTrack a modest -0.1%.
- Melbourne: A similar trend, with CoreLogic down -0.5%, SQM showing a deeper -0.7%, and PropTrack at -0.2%.
These figures suggest that both buyers and sellers are pausing in anticipation of potential interest rate changes, a trend we’ll discuss later.
Brisbane & Adelaide: Still Holding Strong
While Sydney and Melbourne cooled off, Brisbane and Adelaide continued their positive runs:
- Brisbane: CoreLogic recorded a 0.3% rise, SQM had a -0.2% decline, and PropTrack reported a modest 0.1% gain.
- Adelaide: CoreLogic showed a solid 0.7% increase, while SQM went as high as 1.5%, indicating continued buyer interest.
Perth: The Standout Performer
Perth remains one of Australia’s hottest property markets. CoreLogic recorded an impressive 3% increase, while PropTrack remained flat at 0%. This growth is fueled by strong population migration and a comparatively low property price base, making it an attractive option for both investors and owner-occupiers.
Canberra and Hobart: Signs of Weakness
Canberra saw a significant -4% drop according to CoreLogic, alongside an expected decline in government employment, which could dampen demand further. Hobart also saw mixed results, with signs of outflow from Victoria propping up some segments, but not enough to generate strong growth.
What’s Next for Interest Rates?
This is the big question on everyone’s mind: Will the RBA cut interest rates in 2025?
As it turned out, market predictions were right, with the RBA recently cutting rates for the first time in more than four years. Projections from the ASX interbank rate suggest we could see three to four rate cuts over the next 12–18 months, providing some relief to mortgage holders.
However, as we’ve emphasized before, long-term interest rates are unlikely to return to pre-COVID levels. Expect mortgage rates to stabilize around 5% for houses, meaning buyers should plan their investments around realistic long-term costs.
The Rental Market: What Investors Need to Know
Investor Sell-Off in Victoria
Victoria continues to experience an investor exodus, with over 20,000 rental properties lost in the past 18 months due to rising taxes and regulatory changes. This has led to increased home ownership but has also contributed to a decrease in rental supply which is bound to put pressure on rental prices unless the government can do something about supply.
Rental Prices: Stabilization in Some Cities, Growth in Others
While rents surged after COVID, we’re now seeing a moderation in growth, particularly in Sydney and Melbourne. However, Brisbane (16% annual growth), Adelaide (17%), and Perth (22%) continue to see strong rental increases.
Why?
- Housing undersupply: New home approvals are falling well short of the required 20,000 dwellings per month needed to meet demand.
- Population growth: With over 700,000 migrants arriving in the last year, the supply-demand gap is widening.
The big takeaway for investors? The supply shortage means rents are unlikely to drop significantly, making well-located investment properties a strong long-term play.
Final Thoughts: What Does This Mean for Buyers and Investors?
- Market conditions are city-specific. Sydney and Melbourne are slowing, while Brisbane, Adelaide, and Perth continue to grow.
- Interest rate cuts are rolling out—but don’t expect rates to drop below 5% in the long term.
- The rental market is shifting. Investor sell-offs in Victoria are reducing rental supply, but other capital cities are still seeing demand-driven rental growth.
- The housing supply crisis isn’t going away anytime soon. With construction falling short, demand will continue to outstrip supply in many areas, keeping prices stable or rising.
If you’re looking to buy—whether a home or investment—it’s critical to understand these trends and act accordingly. Need help navigating the market? Let’s chat.
📩 Contact me today to discuss your property goals, or drop a comment below with topics you’d like us to cover in future updates.
Next time on The Property Frontline, we’re tackling the hot topic of land tax—how it impacts your investments and what you need to check before you buy. Don’t miss it!
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.
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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.
