Where house prices are tipped to soar AND fall in 2025 amid expectations of rate cuts
House prices in Queensland’s affordable regional cities are expected to continue rising by double digits through 2025, while falling in Australia’s largest cities.
Property research director Simon Pressley predicts double-digit growth in just nine of Australia’s 25 largest cities this year, with a population of at least 100,000.
This is despite expectations of interest rate cuts by the Reserve Bank of Australia.
Sydney, Melbourne and Canberra are expected to perform poorly.
But cities where house prices are still affordable or close to the beach are expected to do particularly well, especially in northern Australia, which is prone to flooding and cyclones.
Mr Pressley, a buying agent, is particularly optimistic about Townsville in north Queensland, predicting a 25 to 30 per cent increase this year.
“The largest city in all of Northern Australia will win the premiership in the national property market by 2025,” he said.
South Townsville is particularly affordable, with an average house price of $539,771, following a 24 per cent increase in the past year, based on data from CoreLogic.
House prices in affordable regional towns in Queensland are expected to continue rising by double digits through 2025, while falling in Australia’s largest cities (pictured is a South Townsville home on the market for the low $500,000s ).
Yet it’s still feasible for someone with a 20 percent mortgage down payment of $107,954 on a salary of $83,000.
Mackay, also in north Queensland, was expected to show growth of 12 to 16 per cent.
“Investors from all corners of the country are also attracted to the above-average rental yields of Mackay properties,” Mr Pressley said.
The average house price of $462,902 in South Mackay is still very affordable and attainable for someone earning $71,216, even after prices increased by 16.5 per cent in the past year.
Cairns in far north Queensland was expected to see growth of 7 to 11 percent, noting the tropical city was home to a naval base, healthcare and construction jobs, and was getting an $80 million airport upgrade .
Parramatta Park near the city still has an affordable house price of $596,882, after an annual increase of 7.2 per cent, and is an option for someone earning $91,828.
In southern Queensland, the inland Lockyer Valley city of Toowoomba was expected to see growth of 9 to 13 percent.
Mr Pressley said 2025 was “looking to be another year of double-digit growth in property values” in Australia’s second-largest inland city after Canberra.
Cairns in far north Queensland was expected to see growth of 7 to 11 percent. Parramatta Park near the city still has an affordable median price of $596,882 (pictured is a house in that suburb that sold for $631,000 in November 2024)
In downtown Newtown, the average home price has skyrocketed 17.5 percent in the past year to $580,097.
Brisbane’s property market is expected to grow by 7 to 10 per cent this year, following last year’s 11 per cent increase, with average house prices rising to $974,396.
The Gold Coast is expected to see growth of 10 to 13 percent by 2025.
Burleigh Waters has been the best performing suburb near the beach over the past year, with the average house price increasing by 13.2 per cent to an even more unaffordable $1.681 million.
The Sunshine Coast was expected to see a 12 to 16 per cent increase.
Moffat Beach near Caloundra performed particularly strongly, with an annual increase of 14.2 per cent to $1.464 million.
Outside of Queensland, Perth was also expected to see double-digit growth by 2025.
The Western Australian capital was forecast to see house price growth of 10 to 14 per cent, on top of last year’s 20.7 per cent growth, bringing the city’s average house price to $842,227.
The Sunshine Coast was expected to see a 12 to 16 per cent increase. Moffat Beach near Caloundra performed particularly strongly, up 14.2 per cent to $1.464 million (pictured is a house that sold for $1.6765 million in September)
Adelaide was expected to see growth of 8 to 11 per cent, adding to the 13.4 per cent increase over the past year, bringing the city’s average house price to $865,563.
But the story was expected to be very different in Australia’s most populous cities.
Sydney house prices are expected to fall by 3 to 5 per cent in 2025, after a year in which annual growth slowed to just 3.5 per cent.
The average house price of $1.483 million means investors are getting poor rental returns, defined as annual rental income minus expenses as a percentage of the property price.
“Apart from the unattractive outlook for Sydney property values, the cash flow equation for Sydney investment properties is as dire as you have ever seen anywhere,” Mr Pressley said.
Melbourne, Australia’s capital’s worst-performing property market in 2024, was expected to have another lackluster year as the Victoria government’s $975 investor land tax continued to deter potential buyers.
Mr Pressley predicted a best-case scenario in which prices would rise by just 1 percent and a worst-case scenario by 2 percent by 2025, despite the city receiving a large influx of overseas migration.
‘While it will always be a grand city, the sad reality is that Melbourne is now in the midst of a ‘Doldrums Decade’ created by a cesspool of bad policy, terrible taxes, toxic conspiracy, vicious attacks on financial aspirants and a disastrous stands. national debt,” he said.
The average house price in Melbourne fell 2.3 per cent last year to $923,422, lagging behind Brisbane and Canberra.
In Canberra, the national capital, house prices were expected to fall 1 to 4 percent in 2025, after rising 0.7 percent to $972,753 in 2024, as more residents moved to other parts of Australia.
“Multiple numbers are moving in the wrong direction for the Canberra property market,” Pressley said. “I expect this real estate market to remain flat for a while.”