The real estate market looks complicated but lucrative as 2025 approaches. Most real estate experts predict that home values will continue to climb, building on the momentum established in late 2024 when the economy began to revive. Increased household savings, lower interest rates, faster real income growth, and better affordability in markets like Melbourne are predicted to fuel home demand despite supply constraints. This increase is anticipated to occur slower than the 4.9% recorded in 2024.

The findings were analysed in a new CoreLogic research called “Decoding 2025,” which polled over 2,400 banking and financial experts and real estate agents to learn more about the housing sector’s issues, such as corporate priorities and first-home buyer patterns.

Businesses in Queensland were the most upbeat, although it’s important to note that Melbourne real estate agents predict a possible comeback in home prices in the Victorian capital due to affordability and a resurgence in demand.

According to CoreLogic’s “Decoding 2025” research, 65% of Australian real estate professionals think that growing wages, better affordability, and the possibility of several interest rate decreases by the Reserve Bank of Australia throughout the year will drive up home values.

As it fights to return excessive inflation to its legislated target range of 2-3%, the central bank has maintained the cash rate at a 13-year high of 4.35% since November 2023.  

According to 25% of respondents to CoreLogic’s survey, home prices will increase by more than 5% by 2025. Just 2% of the minority with a more negative outlook anticipated losses of more than 5%, while 23% believed prices would remain unchanged in 2025, and 10% anticipated a slight softening of prices.

With 70% of respondents predicting house price increase in the Sunshine State by 2025, real estate professionals were most upbeat about Queensland, pointing to the state’s capacity to draw in internal migrants from other parts of Australia.

 Moreover, three-fifths of survey participants expressed optimism about Victoria even though it ranked last out of the five largest states. According to CoreLogic data, Melbourne’s median home value of $774,000 is 6.4% less than its peak in 2022.

 Citing the city’s relative affordability and resurgence in demand, the data analytics business discovered that most real estate agents in Victoria’s capital expect a possible comeback.

“Decoding 2025” also examines the difficulties first-time homebuyers encounter while attempting to climb the housing ladder. Almost 90% of real estate experts reported that they have observed that first-time homebuyers are now taking longer than they did five years ago to save a deposit for their first residence.

Consequently, 77% of those surveyed reported that those purchasing their first property were often older. Additionally, nearly eight out of ten respondents noted an increasing reliance on parental financial support or the “Bank of Mum and Dad.”

This is hardly surprising, given that CoreLogic reports that property values have increased by around 38% nationally over the same period. ABS data indicates that earnings have increased by roughly 15% on average since early 2020.

Real estate experts noted that despite these obstacles, first-time homebuyers are adjusting by looking for smaller, less expensive homes or “reinvesting,” renting in neighbourhoods near family and places of employment while making real estate investments elsewhere.

A Closer Look at the Real Estate Market in Perth

According to REIWA, the Perth real estate market is expected to experience substantial expansion in 2025, with home values expected to increase by as much as 10%. The median home sale price increased by 24.2% from $600,000 at the end of 2023 to $745,000 by December 2024, marking an outstanding 2024 performance.

“Although the growth rate is expected to moderate in 2025 compared to 2024, we anticipate house and unit sale prices to increase by 5% to 10%,” REIWA said, highlighting the main factors driving this growth.

At $745,000 at the end of 2024, Perth’s median home price was 36.7% more than its 2014 peak of $545,000. The median unit price increased 21.4% to $500,000, above the record of $450,000 in 2014.

As buyers and sellers await the results of state and federal elections, market activity may momentarily halt. Although rate reductions could boost demand later in the year, market reluctance could result from speculation about interest rate cuts.

Despite decreasing growth, Perth’s market is strong despite the city’s stable economy, high population growth, and low unemployment rate. By 2025, there will likely be a strong demand for reasonably priced real estate, with apartments remaining a popular option for first-time purchasers and frugal investors.

Developing relationships is a top priority for 2025.

In addition to analysing market trends, the poll identified the top operational needs for real estate companies in 2025.

Agents cited nurturing relationships (84%), turning website visitors into listings (83%), and enhancing team prospecting culture (80%) as their top objectives, in addition to opinions on housing availability and affordability.

Four out of five respondents also cited strengthening one’s online and social media presence and using consumer data to improve performance as top priorities. He stated that having a clearly defined first-party data set is crucial for agencies hoping to expand in 2025.

By knowing their clients’ preferences and behaviours, agents may provide timely, individualised outreach that fosters trust and produces outcomes. In addition to simplifying these procedures, utilising AI tools helps agencies stay ahead of the competition in a market that is becoming increasingly digital.

Decoding 2025 contains the full poll results, including market insights from New Zealand. This expert guide’s practical strategies can help real estate professionals navigate the upcoming year.

The guide gives agents the tools to thrive in a changing market by covering subjects like changing buyer habits, improved data applications, and regional insights.

KEY TAKEAWAYS

• In 2025, 65% of real estate experts anticipate that Australian home prices will climb, with 25% projecting increases of more than 5%.
• According to real estate professionals, as property values rise faster than wages, first-time homebuyers are getting older, saving more, and depending more on parental financial assistance.
• The major experts believe that increasing the supply of homes is the government’s top policy objective in light of the next federal election.

Conclusion

The 2025 real estate market is characterised by cautious optimism. Several encouraging signs suggest a stable and thriving market, even though the sector still deals with home affordability, supply constraints, and growing building prices. Consumer confidence is supported by the economic recovery in several vital industries, and infrastructure improvements and better connections are increasing the allure of new suburbs and regional areas.

Government programs designed to boost the supply of housing, assist first-time purchasers, and promote sustainable growth are also significantly altering market dynamics. As a result of these combined efforts, a more balanced and opportunity-rich environment is being created for homeowners and investors.

Areas such as Bargoti Real Estate are particularly positioned to profit from these trends.

Bargoti Real Estate is a rising contender in the real estate market due to the growing need for affordable, livable, and well-connected communities. Its affordability, infrastructure potential, and sense of community appeal make it a desirable place to live or invest in 2025.

In conclusion, even if the market may present some challenges, the changing environment has a lot of promise, particularly for those who approach it with long-term planning and strategic understanding.

DISCLAIMER – The information and opinion provided is for guidance and general informational purposes only. The sole intention is to provide general understanding of the subject matter so the readers can assess whether they need more detailed information. The information provided on this website should not be regarded as a financial, business, legal or real estate advice and it is strongly recommended that the readers should seek their own independent financial, business, legal or real estate advice. While every effort has been made to ensure that the information and the material is correct and up to date at the date of publication. However, we do not guarantee or warrant the accuracy or completeness of the information provided as the factors like changes in circumstances after the time of publication, may impact such accuracy or completeness. Bargoti real estate will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.