Australian home prices are expected to rise once again with record highs for houses and units in most capital cities.
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Perth, Adelaide, Sydney and Brisbane are expected to lead the pack on house prices in the 2025 financial year, setting fresh records alongside Queensland's Sunshine Coast and Gold Coast, real estate portal Domain says.
By the end of the 2025 financial year, median house prices would exceed $850,000 in Perth and $1.7 million in Sydney, and hit $984,000 in Adelaide and $999,000 in Brisbane, the property marketplace predicts.
Record median house prices are also slated for regional Australia.
Sydney, Brisbane and Adelaide are expected to lead price gains for units.
Sydney's forecast unit growth is set to remain similar to the 2023 calendar year and the 2024 financial year, while growth is expected to accelerate slightly in Melbourne and Canberra.
Median unit prices are forecast to hit new records in Sydney, Brisbane, Perth and Adelaide by the end of the 2025 financial year, with Sydney raking in a median price of $855,000, Domain's house and unit price forecast predicts.
Domain research and economics chief Nicola Powell said population growth, construction challenges and borrowing power would be to blame for the expected price growth in Australia's market.
"We have seen an increase in single-person households and a decrease in household size in general, both amplifying housing demand, further compounded by migration," Dr Powell said.
"Home building has also struggled to keep up with population growth due to the scarcity of land, weak building approvals, and high construction costs, exacerbating the existing structural undersupply."
Stage three tax cuts on July 1 would mean more money hitting Australian households, lifting borrowing capacity across the country, Dr Powell said.
For some, that would mean upping their budgets, while for others, it could mean more borrowing capacity and a push into the market, she said.
"All three factors will play a role in further driving up Australia's home prices," Dr Powell said.
"While the continued increase in property values is good news for Australians that own a home, we have to acknowledge that it's becoming increasingly harder for many Australians trying to get into the property market."
Australia urgently needed more housing supply to balance the market, and the government should accelerate development approvals and incentivise construction, Dr Powell said.
Domain flagged downward price drivers as income stagnation, rising unemployment and a further decline in consumer sentiment.
Australian Associated Press
