Property costs across the majority of the country will continue to rise in the next fiscal year, led by significant gains in Perth, Adelaide, Brisbane and Sydney, a brand-new Domain report has forecast.

House costs in the significant cities are expected to increase between 4 and 7 percent, with unit to increase by 3 to 5 percent.

By the end of the 2025 financial year, the mean house price will have gone beyond $1.7 million in Sydney and $800,000 in Perth, according to the Domain Forecast Report. Adelaide and Brisbane will be on the cusp of breaking the $1 million average house cost, if they haven't currently strike seven figures.

The real estate market in the Gold Coast is expected to reach new highs, with costs projected to increase by 3 to 6 percent, while the Sunlight Coast is expected to see an increase of 2 to 5 percent. Dr. Nicola Powell, the chief financial expert at Domain, noted that the anticipated growth rates are reasonably moderate in most cities compared to previous strong upward patterns. She discussed that rates are still increasing, albeit at a slower than in the previous financial. The cities of Perth and Adelaide are exceptions to this pattern, with Adelaide halted, and Perth showing no indications of decreasing.

Rental rates for houses are anticipated to increase in the next year, reaching all-time highs in Sydney, Brisbane, Adelaide, Perth, the Gold Coast, and the Sunshine Coast.

According to Powell, there will be a general cost increase of 3 to 5 per cent in local units, showing a shift towards more budget-friendly residential or commercial property alternatives for buyers.
Melbourne's property market remains an outlier, with anticipated moderate annual growth of approximately 2 per cent for homes. This will leave the typical house rate at between $1.03 million and $1.05 million, marking the slowest and most irregular recovery in the city's history.

The Melbourne real estate market experienced a prolonged downturn from 2022 to 2023, with the typical house cost coming by 6.3% - a significant $69,209 decline - over a period of 5 successive quarters. According to Powell, even with an optimistic 2% growth forecast, the city's home prices will only handle to recoup about half of their losses.
Home rates in Canberra are anticipated to continue recovering, with a predicted moderate growth ranging from 0 to 4 percent.

"According to Powell, the capital city continues to deal with obstacles in achieving a stable rebound and is expected to experience an extended and sluggish pace of development."

The forecast of approaching cost walkings spells bad news for potential homebuyers struggling to scrape together a down payment.

According to Powell, the implications vary depending on the kind of buyer. For existing homeowners, delaying a decision might lead to increased equity as rates are projected to climb. On the other hand, newbie purchasers might need to reserve more funds. Meanwhile, Australia's housing market is still struggling due to cost and payment capability concerns, intensified by the ongoing cost-of-living crisis and high rate of interest.

The Australian central bank has actually kept its benchmark interest rate at a 10-year peak of 4.35% considering that the latter part of 2022.

According to the Domain report, the restricted schedule of brand-new homes will remain the main element influencing property values in the near future. This is due to a prolonged lack of buildable land, slow building and construction authorization issuance, and raised structure expenditures, which have restricted housing supply for an extended period.

A silver lining for potential homebuyers is that the upcoming stage 3 tax reductions will put more money in people's pockets, consequently increasing their capability to secure loans and eventually, their buying power nationwide.

Powell said this might even more strengthen Australia's real estate market, however may be offset by a decrease in real wages, as living expenses rise faster than wages.

"If wage growth stays at its current level we will continue to see stretched affordability and dampened demand," she said.

In local Australia, home and system rates are anticipated to grow reasonably over the next 12 months, although the outlook varies between states.

"At the same time, a growing population propped up by strong migration continues to be the wind in the sail of property price growth," Powell said.

The revamp of the migration system may trigger a decline in local residential or commercial property need, as the new competent visa pathway eliminates the need for migrants to live in local locations for 2 to 3 years upon arrival. As a result, an even bigger portion of migrants are most likely to converge on cities in pursuit of exceptional employment opportunities, subsequently reducing demand in regional markets, according to Powell.

According to her, removed areas adjacent to metropolitan centers would retain their appeal for individuals who can no longer afford to live in the city, and would likely experience a rise in appeal as a result.