Perth still housing market shining light in 2025

THE City of Light’s property market will keep shining in 2025 as Sydney and Melbourne house prices continue to record falls of up to -5 per cent

They’re the headline takeouts from SQM Research’s managing director Louis Christopher’s Housing Boom and Bust Report 2025.

Nationally, dwelling prices will rise between 1 per cent to 4 per cent with Perth, Brisbane, Adelaide and Darwin expected to outperform the national housing market.

Perth is forecast to record the fastest dwelling price rises of between 14 per cent to 19 per cent – though that’s down from the 25 per cent seen during 2024.

Meanwhile, Canberra is expected to record the largest falls in dwelling prices of between -6 per cent to -2 per cent.

SQM Research is also forecasting an interest rate cut of between 0.25 per cent to 0.50 per cent over mid 2025 based on the view that inflation will continue to moderate, and the overall economy will continue to record below trend growth.

If interest rates are cut as forecasted, this event will immediately stimulate homebuyer demand across the country and will limit the year-on-year dwelling prices falls recorded for our two largest capital cities.

“For 2025, we are not anticipating much of a change in current trends,” said SQM Research managing director Mr Christopher.

“However, we are now anticipating a cut in interest rates starting from mid-year which will continue the price rise momentum in Perth, Brisbane and Adelaide and keep the price falls in Sydney and Melbourne to single digits.

“To be sure, our two largest capital cities, along with Canberra and Hobart will start 2025 off in the red.

“Indeed, we are currently recording dwelling price falls in each of these cities.

“Current interest rate settings are biting the community more in these cities which on our measurements, are in overvalued territory and/or are experiencing slower economic growth compared to the cities (and states) that have enjoyed good economic growth through a buoyant commodities market and/or have had generous contributions from GST receipts.

“However, once interest rate cuts do occur, we are expecting a speedy bounce in demand for Sydney and Melbourne in particular, which both are still experiencing underlying housing shortage relative to the strong population growth rates.

“This may well mean there is a good window for buyers at this time for our two largest capital cities.

“However, if I am wrong and rate cuts do not occur in 2025, it is unlikely a recovery will occur in Sydney and Melbourne at any time next year.”