Property booms are likely to occur in 11 of Australia’s 25 largest cities in the 2025 calendar year. This report contains commentary on each of those 25-cities with a population of 100,000 or more.
One major Australian city could produce 30 percent capital growth in 2025, three capital cities are likely to achieve double-digit growth, and Sydney real estate prices might be about to commence a 15 percent slip.
Propertyology’s forecasts include an assumption that there will be little change to interest rates in 2025.
While 20 out of Australia’s 25 largest cities can expect a positive result from their respective property markets in the 2025 calendar year, the other 5 cities are forecast to experience mild declines, unless the RBA intervenes.
Two of the locations forecast to be among the nation’s worst-performed happen to be Australia’s two largest cities.
This country’s best performed property market in 2025 will be the city which boasts the nation’s most impressive pipeline of economic development and lifestyle enhancements. Townsville’s property market looks cherry ripe for 25 to 30 percent growth in 2025.
Our 14th largest city and the unofficial capital of northern Australia, Townsville is home to a population of 205,000 people and has already claimed the title as Australia’s most improved economy over the last 5-years.
In 2025, residential real estate will again perform very strongly throughout all of Western Australia, Queensland and South Australia.
Conditions in Tasmania and Northern Territory are likely to be on a gradual improve.
New South Wales will produce a mixed bag of results, although Sydney will soften during 2025.
Canberra real estate values will also slip a bit, but nothing to be alarmed about.
Australia’s problem child will (still) be the state of Victoria. It has already been the worst performed state during the last 5-years.
The start-to-finish of Victoria’s doldrums is likely to end up extending to a decade, or longer.
2025 Forecast for Australia’s 25 Largest Cities
25. Albury-Wodonga
2025 Forecast: 3% to 6%
Vacancy Rate: 0.4%
Stock-On-Market 3yr Change: +20%
The volume of real estate buyers in this brilliant cross-border city has returned to normal levels while housing supply is still very tight. Albury-Wodonga is now a ‘balanced’ property market with a very bright future. Progressively during the last decade, Australia’s 25th largest city has capitalised on its geographic proximity to Sydney, Melbourne, Canberra and Brisbane to become Australia’s most important warehousing and logistics hub. A significant portion of the contents of supermarket shelves throughout Australia’s east coast have come via this remarkable inland port city. The eventual completion of the $31 billion Inland Rail Project will be a game changer. And the imminent development of a new $560 million hospital for the city’s population of 102,000 will also be significant. Consistently solid internal migration reflects this ‘mini capital city’s’ popularity for its economic vibrancy, affordable housing (from $600,000 upwards), A-grade amenities and outstanding lifestyle (centred around recreation and culinary experiences).
24. Bundaberg, QLD
2025 Forecast: 5% to 7%
Vacancy Rate: 0.4%
Stock-On-Market 3yr Change: -20%
When the current median house price is just $560,000, it shouldn’t be hard to understand why a significant 2,370 residential real estate transactions took place in Bundaberg in 2024. New infrastructure investment includes the recently started construction of a new $1.2 billion hospital and a $20 million port upgrade.
23. Shoalhaven, NSW
2025 Forecast: 0% to 2%
Vacancy Rate: 2.4%
Stock-On-Market 3yr Change: +145%
The current median house price of $820,000 in the municipality of Shoalhaven is on par with the national average. Located just 2-hours south of Sydney, housing supply volumes in townships such as Jervis Bay, Bomaderry and Nowra is currently higher than many other parts of Australia. Plentiful choices for buyers will influence this region’s ‘flat’ property market in 2025.
22. Fraser Coast, QLD
2025 Forecast: 5% to 8%
Vacancy Rate: 0.5%
Stock-On-Market 3yr Change: +15%
People have voted with their feet, confirming that Fraser Coast has evolved into one of Australia’s most popular places to live. Internal migration added 10,414 (net) to the region’s population over the last 5-years (more than double the 4,177 received by Brisbane City Council, officially Australia’s largest city council). During the last 3-years, the twin towns of Hervey Bay and Maryborough have enjoyed an increase in total job volumes which is 50 percent higher than the national average. During the same 3-year period, real estate values in Fraser Coast increased by 45 percent, on par with the best performed capital cities, Adelaide and Perth. The future looks just as prosperous with the region securing a $4.6 billion government contract to manufacture and maintain the state’s passenger rail fleet, significant urban renewal projects, investments in amenities and new hotels and a vibrant agribusiness sector. A proposal to develop a world-class resort will complement the already expanding tourism sector. Fraser Coast’s tight property market is highlighted by the 28 percent fewer properties currently for sale compared to a decade ago, when 18,000 fewer people lived there.
21. Ballarat, VIC
2025 Forecast: -3% to -7%
Vacancy Rate: 1.5%
Stock-On-Market 3yr Change: +120%
Ballarat’s 40 percent population growth over the last 20-years was superior to Sydney’s 31 percent. Unfortunately, this historic regional city currently has an all-time record high volume of housing supply for sale and a state government which is crippling economic growth. Ballarat’s $510,000 median house price and strong culture provides a solid floor for real estate in this city.
20. Bendigo, VIC
2025 Forecast: 0% to 2%
Vacancy Rate: 1.4%
Stock-On-Market 3yr Change: +49%
Owners of Bendigo real estate have good reason to retain faith in the rock-solid fundamentals while accepting its property market is likely to remain ‘flattish’ for a while. Big ticket infrastructure investments over the last decade (direct rail to Melbourne, a $600 million world class hospital and a new airport) add to Bendigo’s incredibly diverse economy, outstanding lifestyle and internal migration appeal. 20,000 passengers through Bendigo’s airport (now 5-years old) is an encouraging early sign for the unofficial ‘capital city’ of central Victoria. After a super-strong few years, Bendigo’s property market lost some ground in 2023, and then held firm in 2024 while buyer activity increased by 8 percent over the last 12-months.
Related article: Is this Australia’s most reliable property market?
19. Mackay, QLD
2025 Forecast: 12% to 16%
Vacancy Rate: 0.6%
Stock-On-Market 3yr Change: -53%
With a median house price of $550,000, Mackay has the third most affordable real estate of the 25 biggest cities in Australia. Mackay’s biggest projects include a $250 million hospital expansion and urban development of its waterfront. Local buyers in our 19th largest city are currently high on confidence and competing for record low housing supply. Investors from all corners of the country are also attracted to the above-average rental yields from Mackay real estate. This property market will boom in 2025.
18. Darwin, NT
2025 Forecast: 3% to 6%
Vacancy Rate: 1.4%
Stock-On-Market 3yr Change: -15%
While still underwhelming, Darwin’s economic outlook seems to be slowly improving. Construction of the $240 million Charles Darwin University campus was completed in October 2024, and the green light has finally been given for the $515 million Darwin Ship Lift port infrastructure. Buyer activity in Australia’s smallest and most affordable capital city increased by 14 percent over the last 12-months. I expect that improvement to flow through to 2025 producing a bigger increase in house prices than the 1 percent growth in 2024. The outlook for Darwin’s property market in 2025 is superior to several other cities with much higher general profiles.
17. Newcastle, NSW
2025 Forecast: 2% to 5%
Vacancy Rate: 0.9%
Stock-On-Market 3yr Change: +62%
Newcastle’s current median house price of $920,000 is 40 percent less than the $1.6 million in Byron (Australia’s 74th largest township, population of just 37,000). 12-years after starting the development of the exciting East End urban renewal project, the final stage of this precinct is now near. 4.4 percent of Newcastle’s total housing stock changed hands last year, which typically suggests locals are ‘cautiously optimistic’. The current 8,200 properties for sale in the Hunter Valley region is slightly below average, but supply volumes do appear to be rising.
16. Cairns, QLD
2025 Forecast: 7% to 11%
Vacancy Rate: 0.9%
Stock-On-Market 3yr Change: -31%
Cairns’ population grew faster than 6 of 8 capital cities across the last 2-decades. Over the last 5-years, the property market in this tropical northern paradise produced 60 percent capital growth (the same as Sydney, and more than 4 other capital cities). I expect real estate in Cairns to boom in 2025. 3,800 properties currently for sale is a 15-year low. Rental accommodation is so tight that rent prices have increased by $100 per week over the last 2-years. Housing demand is underpinned by strong sectors such as Health, Construction, Defence (navy) and Tourism. The healthy project pipeline includes a $80 million airport upgrade and $91 million stadium redevelopment.
15. Toowoomba, QLD
2025 Forecast: 9% to 13%
Vacancy Rate: 0.6%
Stock-On-Market 3yr Change: -27%
Australia’s 2nd largest inland city has a current population of approximately 185,000 people. Confidence is high, as evident by the 5.8 percent turnover of Toowoomba’s total housing stock during the last 12-months. 2025 looks set to be another year of double-digit growth in real estate values for Toowoomba’s tight property market.
14. Townsville, QLD
2025 Forecast: 25% to 30%
Vacancy Rate: 0.7%
Stock-On-Market 3yr Change: -32%
The biggest city in all of northern Australia will win the national property market premiership in 2025. Like seagulls fighting over a few chips, buyers will compete seriously hard for an all-time record low volume of housing supply. The current median house value of $520,000 could well and truly increase by an extraordinary 30 percent in the 2025 calendar year. Driving the growth is the single most impressive collection of major projects of any Australian city for decades. On the back of a major infrastructure expansion and $12 billion worth of commodities exported last financial year, the national maritime industry just awarded Townsville as Australia’s Port of the Year. The consistent upward job creation trend, the city’s emergence as a major events destination and Townsville’s recent urban transformation has been exciting to observe. And the combination of a relaxed lifestyle, A-grade infrastructure and affordable housing never goes out of fashion.
13. Wollongong, NSW
2025 Forecast: 0% to 2%
Vacancy Rate: 1.0%
Stock-On-Market 3yr Change: +90%
The Illawarra region is one of the many beautiful parts of regional Australia. That said, ‘beauty’ is highly subjective and is far from the biggest factor in ‘housing demand’. Over the last 5-years, Wollongong experienced a net population loss of 2,024 from internal migration. The lofty median house price of $1,055,000 is not everyone’s cup of tea. Wollongong’s most exciting project is the $229 million 3-tower development of ‘The Globe’ (a 236-room, 5-star hotel and adjoining office block in the CBD). Property market conditions in Wollongong are likely to remain ‘soft’ for a little while.
12. Lake Macquarie, NSW
2025 Forecast: 3% to 6%
Vacancy Rate: 0.9%
Stock-On-Market 3yr Change: +95%
This popular lifestyle location attracted 5,909 people from internal migration over the last 5-years, mostly former residents of Sydney. The combined sum of various current real estate metrics portrays a ‘balanced’ property market. Perhaps of some concern is just 2.5 percent increase in job volumes over the last 3-years in Lake Macquarie and Newcastle combined – well below the 10.7 percent national average.
11. Hobart, TAS
2025 Forecast: 1% to 3%
Vacancy Rate: 0.6%
Stock-On-Market 3yr Change: +120%
Australia’s best-performed property market across the last 20 years was underwhelming throughout the entire 18-month RBA rate rise cycle. Hobart house values ended 2024 exactly where they started. That said, a 7 percent increase in Hobart’s property transaction volumes over the last 12-months supports anecdotal evidence from real estate agents that local confidence is on the rise again. There is currently a high volume of C-grade listings on the market, but presentable properties which are priced right are now moving pretty quickly. First home buyer activity is solid and the volume of buyers relocating from the mainland appears to be on the rise again. The milestone moment most likely to influence Hobart’s next growth cycle is the development of a world-class entertainment precinct with a roofed stadium. That game-changing project is a non-negotiable requirement for the state’s much overdue entry into the national AFL competition. The subsequent boost to the economy in both Hobart and Launceston will be enormous. And it will coincide with the current investment in Hobart’s airport infrastructure, opening the door for international flights.
10. Geelong, VIC
2025 Forecast: 1% to -2%
Vacancy Rate: 2.2%
Stock-On-Market 3yr Change: +96%
From 2009 onwards, the great regional city of Geelong has consistently been Victoria’s strongest ‘magnet’ for internal migration. But, like everywhere else in the state of Victoria, its property market is currently ‘soft’. There’s an elevated volume of housing stock on the market and buyer confidence has waned. This is best illustrated by the 20 percent reduction in Geelong real estate transaction volumes, from 6,615 in 2021 to 5,340 last year. Vendors will need to continue to taper their expectations in 2025 (and beyond).
Related article: Geelong’s rags-to-riches transformation
9. Central Coast, NSW
2025 Forecast: 3% to 6%
Vacancy Rate: 0.7%
Stock-On-Market 3yr Change: +47%
Now ‘home’ to a regional population of 353,000 people, Gosford and Wyong are the primary service centres for the municipality of Central Coast. As with every location, different pockets within this region come with contrasting real estate offerings. Other adjoining communities include Woy Woy, Terrigal, Avoca Beach and Tuggerah Lake. The 5 percent decline in Central Coast property values during 2023, primarily due to RBA rate rises, was regained in 2024 and returned Central Coast’s median house price to $930,000. The conditions in this popular location for those with close ties to Sydney now reflect a ‘balanced’ property market.
8. Sunshine Coast, QLD
2025 Forecast: 12% to 16%
Vacancy Rate: 0.8%
Stock-On-Market 3yr Change: +10%
With a current median house price of $1,050,000, Sunshine Coast is likely to be Australia’s second best-performed property market in 2025, behind Townsville. Housing supply is seriously tight while demand is driven by local economic strength, a very active home upgrade market and 57,876 (net) internal migrants over the last 5-years (Australia’s biggest beneficiary in percentage terms). Last financial year’s airport passenger volumes were 50 percent higher than the pre-COVID year, compared to a 6 percent decline experienced by the combined capital cities. That’s a compelling contrast!
FUN FACT:
Almost every one of Australia’s 400+ townships have averaged more than 5 percent growth in median house prices over the last 20-years. A ‘boom’ is therefore defined by growth of 8 percent or more in a given year.
7. Canberra, ACT
2025 Forecast: -1% to -4%
Vacancy Rate: 1.7%
Stock-On-Market 3yr Change: +63%
Retreating internal migration numbers, sluggish airport passenger volumes, middle-of-the-pack visitor spending, an anticipated curbing of government spending, one of Australia’s highest rental vacancy rates and ample housing stock for buyers to choose from… Multiple metrics are trending in the wrong direction for Canberra’s property market. I expect this property market to be ‘flat’ for a while yet. Current conditions suit owner-occupier upgraders.
6. Gold Coast, QLD
2025 Forecast: 10% to 13%
Vacancy Rate: 1.1%
Stock-On-Market 3yr Change: -6%
A significant portion of the 250,000 (net) residents who relocated away from Sydney during the last decade now reside on the Gold Coast, where the median house price is currently higher than 7 of the 8 capital cities. At a development cost of $2 billion, ‘The Landmark’ 4-tower apartment and hotel project adjacent to Pacific Fair shopping centre is expected to kick-off in 2025. Despite already producing 90 percent capital growth over the 5-years ending 2024, real estate on the Gold Coast are expected to boom again in 2025. There’s no sign of a slowdown in either its local economy or internal migration. That said, the luxury market appears to be stronger than the middle-income market, many of whom will have reached their affordability ceiling.
5. Adelaide, SA
2025 Forecast: 8% to 11%
Vacancy Rate: 0.6%
Stock-On-Market 3yr Change: -25%
This gorgeous city will always have its industry roots in Manufacturing and Agribusiness. But an exciting evolution over the last decade has positioned Australia’s 5th largest city as a global innovator in sectors such as Health, Space and Defence. Then there’s last year’s 7.3 million domestic airport passengers, which partly relates to Adelaide’s annual calendar of major events. The year-round attractions now include a variety of elite sports, culinary festivals, their amazing wineries and the Arts. It’s no wonder that local community confidence is high. But housing is so tight that the 9,586 properties currently listed for sale is roughly half the 17,136 from a decade earlier, when 140,000 fewer people lived there. Adelaide has the best overall fundamentals of the 8 capital cities. Buyer activity increased every month since Easter 2024, influencing further growth in Adelaide’s real estate assets.
4. Perth, WA
2025 Forecast: 10% to 14%
Vacancy Rate: 0.5%
Stock-On-Market 3yr Change: +40%
Perth’s median house price has already increased by 50 percent over the last 3-years, including 20 percent in 2024. Local confidence is understandably high, and housing supply is still very tight. Time will tell whether a large spike in resale listings for the month of November 2024 is an anomaly or the beginning of a new trend? I expect Perth’s property boom to continue in 2025, but rates of growth will recede during the back end of this market’s growth cycle. As always, beware the actions of China and iron ore prices.
3. Brisbane, QLD
2025 Forecast: 7% to 10%
Vacancy Rate: 1.0%
Stock-On-Market 3yr Change: -14%
Brisbane’s housing supply tightened further during 2024. While the pool of buyers was not quite as deep in 2024 (37,700 houses sold) as it was during the almighty boom of 2021 (44,000 sales), it still produced a whopping 64 percent more buyers than the corresponding period prior to the pandemic. 2025 marks a new reign for Queensland, with a completely new government for the first time in 9-years. Initiatives which are likely to have a positive influence on Brisbane’s property market include first homebuyer incentives, a more pragmatic attitude towards rental suppliers, and the potential announcement (March 2025) of a new entertainment precinct and world class stadium ahead of the Olympic Games. While much gets said about Brisbane attracting Australia’s highest aggregate population from internal migration, the devil is always in the detail. Only 4,177 of the total 84,346 people who relocated over the last 5-years settled into a home within the municipality of Brisbane City Council (Moreton Bay was the most popular, with 30,000 internal migrants).
2. Melbourne, VIC
2025 Forecast: 1% to -2%
Vacancy Rate: 1.7%
Stock-On-Market 3yr Change: +14%
Property market conditions in Melbourne are currently most suitable for home upgraders. While it will always be a grandiose city, the sad reality is that Melbourne is now in the middle of a ‘Doldrums Decade’ created by a cesspit of poor policies, terrible taxes, poisonous collusion, vicious attacks on financial aspirants and a disastrous state government debt destined to reach $228 billion by 2028. For businesses and for housing, the private sector has abandoned investing. And the public sector will be burdened for many years by a state government interest bill which is heading towards $1 billion per month. Victoria’s ability to fund ever-growing demand for health and infrastructure is screwed for several years. A city which usually maintains a ‘neutral’ status with internal migration, Melbourne’s net population decline of 82,000 over the last 5-years speaks volumes about its resident’s disapproval. Melbourne was Australia’s worst performed property market over the 5-years ending 2024, despite an all-time record 300,000 overseas migration over that period. And prevailing conditions will ensure that it continues to be sub-par for the next 5-years. For property investors, these are the least appealing market fundamentals – only an unwise confirmation bias could conclude otherwise. Choose your path carefully!
1. Sydney, NSW
2025 Forecast: -3% to -5%
Vacancy Rate: 1.5%
Stock-On-Market 3yr Change: +23%
An all-time record high 280,000 (net) overseas migration over the last 2 financial years translated to a mild 6 percent increase in Sydney’s median house price – far from a boom. With job volumes across Australia increasing by 10.7 percent over the last 3 financial years, the modest 4.6 percent increase in Sydney’s CBD (its economic engine) says much about prevailing conditions of Australia’s biggest city. Sydney’s luxury housing market is currently performing significantly better than the middle and lower tiers. The current real estate listing volumes is fast approaching the record-high housing supply which produced an 18 percent decline in Sydney’s median house price over the 2-years ending July 2019. While it’s anyone’s guess what the RBA will do with interest rates, their actions will impact Sydney significantly more than elsewhere. I anticipate Sydney’s property market to swivel from its 4 percent growth in 2024 to a 4 percent dip in 2025. I won’t be surprised if the cumulative 15 percent gain from the 3-years ending 2024 is wiped out over the next 18-months to mid-2026. Aside from the unattractive outlook for Sydney’s real estate values, the cash flow equation from Sydney investment properties is as awful as one has ever seen (anywhere).
Property Investment Trends
While some people allow themselves to be dragged down by the negative news of the day and a so-called ‘cost-of-living crisis’, the reality is that a large majority of Australian households have never had more equity than right now, and their cash reserves are substantial [source: RBA].
The truly wise folks will be putting their existing equity to good use.
Propertyology expects the most active segment of buyers to be savvy Gen Xers entering the investment sweet-spot of their life.
With only 10 or so years left in the workforce, intelligent leveraging of current real estate equity to accumulate a bigger asset base will have a significant influence on their lifestyle quality when they eventually retire.
CALCULATE: How big does your nest egg need to be to retire comfortably?
Gen Y RentVestors are also likely to be very active in 2025.
All investors in Australian real estate owe it to themselves to consider 100 percent of their options and adopt a borderless attitude, just like this.
Take confidence from the fact that, over the last 20-years, the median house price tripled in most of the 400+ individual cities and townships across the 6th largest country in the world [here’s the evidence].
Two (2) general tips for all property investors are to:
- avoid capping capital growth potential through compromised asset selection, and
- set a realistic budget. In 2025, the best combination of sensible investment capital allocation and responsible cash flow management requires a purchase budget of between $650,000 and $750,000.
Invest with the best: CONTACT US
Big-Picture Factors
The first few months of 2025 will be dominated by unproductive Federal Election posturing. As with every other election, housing is guaranteed to generate a lot of noise.
My advice to those who care about property market performance is to don’t let the clowns in Canberra cause you to become a dear in the headlights.
And don’t get drawn into commentary which (incorrectly) implies things such as overseas migration, housing construction activity, the change in national GDP and unemployment rates have a big influence on capital growth rates [learn from evidence].
Regardless of who says what about Australian housing and property markets, here are 16-key facts to focus on:
- 272,645: total supply of homes currently for sale (25 percent less than 363,853 properties 10-years ago)
- 4 million: total increase in Australia’s population over the last 10-years
- 538,111: new home construction commencements over the last 3 financial years
- 10,311: new home approvals over the last 3 financial years to be funded by all levels of government
- 41,894: total supply of homes currently advertised for rent (37 percent less than 66,639 properties 10-years ago)
- 15,000: total properties added to the national rental pool by governments over the 48-years since 1976 (while the national population increased by 13 million)
- $100+ billion: revenue received by governments from property taxes last year alone
- 522,525: total volume of real estate transactions last year (13 percent more than the previous year)
- 117,101: total properties purchased by first home buyers last year (9 percent more than the previous year)
- 1,759,616: total increase in job volumes over the last 3-years
- 405,581: total volume of current jobs advertised
- 116,433,935: total domestic flights last financial year (6 percent more than the previous year)
- 4.35 percent: current RBA cash rate (unchanged for 12-months, but expected to reduce in H2 2025)
- 0.9 percent: total home loans in arrears
- $1.7 trillion: total household cash reserves (offset accounts, term deposits)
- $7.5 trillion: total equity in residential real estate (average national LVR of 30 percent)
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About The Author [Simon Pressley, Propertyology Head of Research]
