You may be chasing more affordable prices, dreaming of a lifestyle change, or spotting investment potential in a different market altogether. No matter the reason, buying property in another state can be pretty tempting. But let’s be clear: buying interstate isn’t quite the same as finding a place down the road. You may have to […]
Australian Property Market: The Key Trends You Need to Know
By Deltos Finance on January 13, 2025
2025 looks promising for anyone planning to buy their first home, refinance their mortgage or invest in a rental property in Australia. Following a challenging previous year characterised by high interest rates and fluctuating market performances, today’s Australian property market emerges with new real estate opportunities. If you want to know where the best prospects lie, you can start by eyeing the trends that currently shape the market. Here are some property trends you need to know.
Trend #1: Regional Property Boom
What drives this trend? It all started with the COVID-19 pandemic. It sparked a significant shift in property demand from metropolitan areas to regional locations. This trend has continued due to the prevalence of remote work and improved regional infrastructure. Also, affordability in regional areas like Tasmania is undeniable, especially when compared to major cities like Sydney & Melbourne.
Here are some key insights you need to know about this property trend:
- Many Australians seek more space, affordability, and a better quality of life away from crowded cities.
- Improved internet connectivity and infrastructure development have made regional living more attractive for first-home buyers and digital nomads.
- With regional migration trends remaining strong, property demand in regional markets like Tasmania is projected to stay robust in 2025 & the coming years.
What does it mean for property investors in 2025?
Investors (including those who want to buy their first home through rentvesting) should consider diversifying their portfolios to include regional properties. Areas with strong economic fundamentals, growing populations, and improving infrastructure are likely to offer good returns and capital growth. However, it’s vital to research specific regional markets, as performance can vary significantly between locations.
Trend #2: Rise of Smart Homes and Sustainable Living
Technological advancements and increasing environmental awareness drive the demand for smart and sustainable homes in Australia. The potential cost savings from energy-efficient homes also attract many potential buyers and investors.
Here are some key insights you need to know about this property trend:
- Properties equipped with smart technology, such as automated lighting, climate control, and security systems, are in high demand, especially in affordable Australian property markets.
- Eco-friendly features like solar panels, energy-efficient appliances, and sustainable building materials are becoming standard expectations.
- Green homes often command premium prices and have lower ongoing costs.
What does it mean for property investors in 2025?
If you plan to invest in property in Australia in 2025, you should consider upgrading existing properties with smart and sustainable features to increase their appeal and value. Looking for new investments? Prioritise properties with these features or those that can be easily upgraded. The initial cost may be higher, but the long-term benefits in rental yield, low vacancy rate & capital growth could be significant.
Trend #3: Government Policies and Incentives
The Australian government has many ongoing efforts to improve housing affordability. Several federal and state government initiatives support first-time homebuyers and offer shared equity schemes. There could also be potential adjustments to interest rates and lending policies. The government’s infrastructure investments influence property values positively, too.
Here are some key insights you need to know about this property trend:
- Programs like the First Home Owner Grant and various stamp duty concessions remain influential.
- New policies focusing on increasing housing supply and affordability are being introduced.
- There’s growing emphasis on support for build-to-rent schemes and social housing initiatives.
What does it mean for property investors in 2025?
Stay informed about current and upcoming policies because they can provide opportunities or challenges. For example, increased support for first-home buyers might drive demand in certain market segments. Build-to-rent incentives could open new investment avenues. However, be aware that policy changes can also impact existing investments, such as changes to negative gearing or capital gains tax rules.
Trend #4: Changing Demographics and Housing Preferences
Australia’s changing demographics and evolving lifestyle preferences reshape housing demand. For instance, the ageing population prefers downsizing or moving to retirement communities, while younger generations prioritise flexibility and affordability, giving rise to co-living homes. There’s also
Here are some key insights you need to know about this property trend:
- There has been an increased demand for downsizer-friendly properties and retirement living options.
- Younger generations prefer flexibility, affordability, and location over size.
- Growing interest in multi-generational living and co-living arrangements could change how investors and developers build new properties.
- The rising demand for specialist disability accommodations (SDAs) is worth considering, too.
What does it mean for property investors in 2025?
Consider diversifying your investment portfolio to cater to different demographic needs. Properties that can adapt to various living arrangements (e.g., dual living potential, granny flats) may offer versatility and broader appeal. In urban areas, smaller, well-located properties might outperform larger homes. In retirement hotspots, properties suitable for downsizers could see strong demand.
Trend #5: Shift from Rental to Sales Market as Yields Improve
Strong rental growth outpacing price growth in many regions has led to improving rental yields. This is particularly evident in slower-moving markets like NSW, VIC, ACT and TAS. As yields become more attractive, investor activity is expected to increase, potentially shifting housing demand from the rental to the sales market.
Here are some key insights you need to know about this property trend:
- InvestorKit reported that 169 out of 332 SA3 regions experienced rental growth, outpacing price growth by November 2024, leading to increased rental yields.
- 109 SA3 regions now offer yields between 3.5% and 4.5%, up from 97 the previous year.
- Areas with moderate yields (3.5-4.5%) are concentrated in Melbourne, Brisbane, Sunshine Coast, Gold Coast and the rest of NSW’s coastal regions.
What does it mean for property investors in 2025?
Property investors in Australia should pay close attention to areas where rental yields are improving, particularly those in the 3.5-4.5% range. These markets, which have historically had lower yields, may become more attractive as rental growth continues to outpace price growth. This trend could lead to increased competition in the sales market as more investors enter, potentially driving up property values in these areas.
Let Us Help You Find Your Best Prospects
Knowing these Australian property market trends is one thing; using these insights to your advantage is another. This is where our expertise can step in and help you make more informed decisions.
Contact our team today. As seasoned mortgage brokers in Tasmania, we know the ins and outs of the local property market. We will point you in the right direction and help you find the best way to finance your next property in Hobart or Launceston.
Need more property investment advice in Australia? Check out more of our blogs.
Enquire Now
Find Your Perfect Finance Solution
Let's discuss your finance needs. We’re here to help.
More posts from Deltos Finance
Suburbs with the Highest Rental Yield in Tasmania
The term “rental yield” is music to any property investor’s ears. It’s the key metric that indicates the annual return on your investment, essentially the percentage of the property’s value that comes back to you in rental income. In a market like Tasmania, which has been gaining traction for its overall investment appeal, pinpointing the […]
Launceston: A ‘Second Wind’ Property Market You Should Invest in Now
When talk turns to Tasmania’s property scene, it’s easy for the spotlight to shine brightly on Hobart, with its bustling waterfront and historic charm. But just a little further north, nestled at the head of the picturesque Tamar Valley, lies Launceston—a city that quietly hits its stride and presents a compelling proposition for savvy property […]
How Often Does Property Double in Value?
Every homeowner has likely dreamed of their property doubling in value in the future, turning into a valuable nest egg or funding their next big adventure. But how long does it actually take for a property to double in value? And how often does it happen? While there’s no magic eight-ball to predict the property […]
Stamp Duty Exemption for First-Home Buyers in Tasmania: Has It Paid Off?
Purchasing a property has historically come with major financial difficulties, especially for first-home buyers in Tasmania or any other state for that matter. The stamp duty is one of those most notable monetary challenges for homebuyers. Essentially, it’s a tax levied on property purchases that often adds tens of thousands of dollars to upfront costs. […]
Difference Between Airbnb and Traditional Renting in Hobart
Hobart’s property market has become a hotspot for investors largely because of its strong tourism demand and stable rental market. But that doesn’t mean all property investments in this Tasmania capital are a sure win. One factor to consider is deciding between short-term rentals like Airbnb and traditional long-term renting. Each option has distinct advantages […]
Is Launceston a Good Place to Live?
The short answer is yes, especially if you want a more affordable lifestyle without giving up access to key services, natural beauty, and long-term opportunities. Also, with its blend of heritage charm, steady economic growth, and a property market still within reach for many Australians, Launceston, Tasmania, is gaining momentum as a popular area for […]
Hobart Property Management Fees: A Complete Guide
You’ve already secured an investment loan and finalised your rental property purchase in Hobart. Now, it’s time to take action by listing the property for rent and managing it effectively to start generating rental income. But how much should you expect to spend on property management in Hobart, Tasmania? As Tasmania’s capital continues to attract […]
How Rising Property Prices Affect Your Home Loan and Buying Potential
Here’s the good news: the Australian real estate market has been experiencing significant growth in recent years, with house prices in major cities reaching record highs. It can be a huge win for homeowners and investors, especially those planning to sell their properties soon. However, this can be an issue for potential property buyers, including […]
Build Your Wealth with a Simple Guide to Using Your Home Equity
Building wealth requires adopting the right mindset and being strategic when using available financial instruments. Essentially, it’s about making your money work in your favour. But what if you don’t have enough cash to start creating wealth? There’s an underutilised strategy that we want to share with you, and that is leveraging your home’s equity—the […]