{"id":42253,"date":"2025-06-26T13:31:35","date_gmt":"2025-06-26T06:31:35","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=42253"},"modified":"2025-06-26T13:31:35","modified_gmt":"2025-06-26T06:31:35","slug":"what-is-driving-the-aussie-property-surge-in-2025","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/what-is-driving-the-aussie-property-surge-in-2025\/","title":{"rendered":"What is driving the Aussie property surge in 2025?"},"content":{"rendered":"

Foreign interest, policy reform, and rental demand push Melbourne to the forefront<\/span><\/span><\/p>\n

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A key trend this year is the return of international interest. Gustavo Frazao\/Shutterstock<\/figcaption><\/figure>\n

The housing market in Australia continues to break records and draw global interest as it heads deeper into 2025. National dwelling prices have reached historic highs, driven by growing investor confidence, policy momentum, and renewed international engagement\u2014despite stubborn supply challenges.<\/span>\u00a0<\/span><\/p>\n

According to <\/span>Elite Agent<\/span><\/a>, the national mean dwelling price surpassed AUD1 million (USD670,000) for the first time in January 2025. Markets such as Melbourne, Sydney, and Brisbane are seeing especially strong activity, buoyed by continued demand and the promise of further interest rate cuts.<\/span>\u00a0<\/span><\/p>\n

Melbourne market set to thrive<\/span><\/b>\u00a0<\/span><\/p>\n

“Melbourne\u2019s housing market is set to remain buoyant in 2025,” said Benson Zhou, Director – Hotels, CBD and Metropolitan Sales, State Head – Asia Markets at Savills Australia, and member of the Judging Panel of the PropertyGuru Asia Property Awards (Australia). “A range of economic and policy factors [are] reinforcing demand despite ongoing supply constraints.”<\/span>\u00a0<\/span><\/p>\n

Zhou noted that a key trend this year is the return of international interest. As inbound travel recovers and the Australian dollar remains relatively weak, overseas buyers are looking to Melbourne as a long-term investment destination. \u201cA softer currency makes local real estate more attractive to overseas investors and expatriates, especially those seeking stable, long-term assets in a globally recognised city,\u201d he explained.<\/span>\u00a0<\/span><\/p>\n

Policy tailwinds and supply pressures<\/span><\/b>\u00a0<\/span><\/p>\n

While borrowing conditions are improving due to anticipated rate reductions, challenges remain. High construction costs and labour shortages are delaying project completions, keeping supply limited even as demand rises.<\/span>\u00a0<\/span><\/p>\n

Realestate.com.au<\/span><\/a> reported that South Australia has passed innovative planning reforms aimed at easing the housing crisis nationwide. These laws introduce fast-tracked approvals for developments in key urban corridors and promote medium- to high-density housing near public transport nodes\u2014measures designed to boost supply where demand is strongest.<\/span>\u00a0<\/span><\/p>\n

Meanwhile, in Victoria, officials are also pushing for streamlined approvals and greater density around transit hubs. As Zhou noted: \u201cThe Victorian Government\u2019s recent planning reforms\u2014focused on streamlining approvals and encouraging density around transport hubs\u2014are a step in the right direction, but their impact will take time to materialise.\u201d<\/span>\u00a0<\/span><\/p>\n

\u201cIn the short term, this means the imbalance between demand and supply is likely to persist, further supporting price growth,\u201d he added.<\/span>\u00a0<\/span><\/p>\n

Buyers focus on education and lifestyle precincts<\/span><\/b>\u00a0<\/span><\/p>\n

International buyers are particularly drawn to new apartments and townhouses near universities and lifestyle centres. “Offshore buyers, in particular, may target new apartments and townhouses in key education and lifestyle precincts, boosting activity in areas close to universities and the CBD,” Zhou shared.<\/span>\u00a0<\/span><\/p>\n

The Australian rental market remains tight, offering compelling yields for investors. This, combined with increased purchasing power from lowered interest rates, is expected to lift both domestic and international investor activity.<\/span>\u00a0<\/span><\/p>\n

Australian Property Update<\/span><\/a> reported that the market is positioned for heightened activity this year, citing easing borrowing conditions and strong demand fundamentals.<\/span>\u00a0<\/span><\/p>\n

Housing pressures in Western Australia<\/span><\/b>\u00a0<\/span><\/p>\n

\u201cHere in Western Australia, the housing crisis has only intensified in the past two years,\u201d said Lui Violanti, Regional Manager – Western Australia, Inhabit Group and Vice Chairperson of the PropertyGuru Asia Property Awards (Australia) Judging Panel. \u201cLast week, the government media announced that the population of Western Australia has increased 2.4 percent and officially tipped over three million people, with the state having the fastest growth rate of anywhere in the country last year.\u201d<\/span>\u00a0<\/span><\/p>\n

\u201cThe Bankwest Curtin Economics Centre found 210,000 West Australian households now believed their housing to be unaffordable, an increase of 91 per cent since 2023,\u201d he added.<\/span>\u00a0<\/span><\/p>\n

Violanti cited the Housing Affordability in Western Australia 2025 report, which revealed the state\u2019s housing market is under intense pressure from rapid population growth, slow housing supply, soaring rents and construction delays. \u201cWith 119,000 new residents since 2023, demand for housing had surged way past supply.\u201d<\/span>\u00a0<\/span><\/p>\n

\u201cWA recorded a shortfall of 4,000 new homes despite more than 20,000 homes being completed last year, the most since 2017,\u201d he noted. \u201cBuilding times in Western Australia were the highest in the country, taking more than 15 months to complete a house, adding AUD100,000 to the price of a new home.\u201d<\/span>\u00a0<\/span><\/p>\n

He also highlighted that a growing discrepancy between key worker wages and housing costs meant most single-income workers such as nurses, police officers, and firefighters were priced out of home ownership in many parts of Perth.<\/span>\u00a0<\/span><\/p>\n

\u201cRentals were also in short supply with a lack of 7,700 homes, pushing rents up 76 percent in the past five years and tenants out to the fringes of the metro area adding stress, complexity, and extra costs to their lives.\u201d<\/span>\u00a0<\/span><\/p>\n

Violanti further emphasised, \u201cPersistent shortfalls in housing and chronic underinvestment in social housing had strained support services and exposed failures in WA\u2019s housing system.\u201d<\/span>\u00a0<\/span><\/p>\n

\u201cThe delivery of social and affordable housing is a significant policy issue for the State and Commonwealth Governments. A lack of appropriate housing is resulting in more people seeking the safety net of public housing, meaning the State\u2019s public housing waitlist is growing faster than the delivery of business-as-usual social housing can maintain.\u201d<\/span>\u00a0<\/span><\/p>\n

He noted that WA\u2019s State budget has allocated funding for 13 social housing projects, earmarked to be \u201cbuilt to rent\u201d developments.<\/span>\u00a0<\/span><\/p>\n

Australia shines on the regional stage<\/span><\/b>\u00a0<\/span><\/p>\n

As Australia\u2019s property market enters a new phase of global competitiveness, its developers and projects are earning recognition across the region.<\/span>\u00a0<\/span><\/p>\n

At the <\/span>19th PropertyGuru Asia Property Awards Grand Final 2024<\/span><\/a>, Australian entries secured multiple accolades among peers from 15 markets across Asia and the Middle East:<\/span>\u00a0<\/span><\/p>\n