The property market in 2024 was a wild ride; surprisingly strong, yet unpredictable, with interest rates and investor confidence fluctuating.
“People were nervous to make decisions,” Advocate Property Services Founder and CEO Jodie Vadillo says.
What could the rest of the 2025 property market look like?
As we step into 2025, investors are eyeing opportunities, but the landscape is shifting.
With an impending election, potential rate cuts and shifting rental dynamics, what does the year ahead look like for property investors?
Here’s what the experts say.
The market is still in transition
While 2024 saw unexpectedly strong price growth, Executive Manager of Economics at REA Group, Angus Moore, says the pace of the market is starting to shift.
“The property market in 2024 was surprisingly robust with prices up across the year and a pretty busy pace of activity around the country," he says.
“We have seen conditions soften a little bit over the back half of the year. As more choices become available for buyers, it has gotten a little bit less competitive.”
Interest rates remain a key factor
Even though interest rates have risen sharply in recent years, making borrowing more expensive and forcing investors to rethink their strategies, Angus says the economy remains relatively robust and unemployment quite low.
“In that environment, we're expecting that housing demand will remain fairly solid,” he says.
At the same time, CommBank Home Lending Specialist, Zain Sumar says it’s difficult to ascertain what the property market looks like for 2025.
"If rates do end up coming down over the course of the year, what that means is people’s borrowing capacity will strengthen, and as a result, they'll likely have more to spend on the property that they’re wanting,” he says.
This could be a game-changer for investors, creating better buying conditions and potentially boosting property values.
More properties are coming to market
One of the biggest shifts in 2024 was the increase in available properties, particularly in Sydney and Melbourne.
Jellis Craig Richmond Director Elliot Gill says, “buyers had a lot of choice, but limited price growth”.
The good news for investors, Angus says, is that in 2024 we saw quite a lot of new properties coming to market.
“That means that, particularly in Sydney and Melbourne, there’s actually more properties for sale than we’ve seen in about a decade."
For investors, this means more choice and potentially better deals, as increased supply can lead to less competition and stabilised prices.
Rental growth is stalling
For much of 2023 and 2024, rents surged across Australia, making property investment highly attractive.
However, that growth is starting to slow.
"It does look like we're starting to see the pace come out of rent growth, and we're expecting that's going to continue in 2025,” Angus explains.
This doesn’t mean rents will fall, but rather that the rapid increases of previous years may stabilise. This could affect investors who were relying on sharp rent hikes to offset mortgage costs.
Investors are still selling
Despite improving conditions, Elliot says many investors are still selling.
"What that's doing is giving the owner-occupiers a lot of choice to actually go and buy their property this year.”
He says this trend could present an opportunity for new investors to enter the market at a time when stock levels are higher, and competition for properties may be less intense.
But Jodie predicts we're going to see an increase in investor activity this year.
“With that will come an increase in rental opportunities out there for tenants,” she says.
“And it'll help plateau pricing.”
The premium property gap will widen
More stock on the market means more competition and Elliot predicts this will lead to a discrepancy between the premium properties and the properties which have a few challenges with them.
“And a bigger price difference between the two as buyers get a bit more selective.”
What should investors consider in 2025?
For those looking to buy an investment property, Zain says planning ahead is key.
"What Aussies looking to buy this year should consider is, number one, what kind of deposit they're wanting to put down”.
Depending on where you are in your home buying journey there are a range of options available that our CommBank lenders can talk through.
"The other really important consideration is what their monthly repayment capacity is,” Sumar explains.
“Aussies can make their property goals a reality by speaking to a lending specialist and ensuring that they have a tailored loan that really works for them."
So, is 2025 a good year for investors?
The short answer? Yes - with the right strategy.
For those considering a move in 2025, now is the time to get financially prepared, research high-performing suburbs, and look for smart, sustainable investments.
While market conditions will continue to shift, well-informed investors stand to gain the most in the year ahead.
Disclaimer: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information. Applications for finance are subject to credit approval. Eligibility, terms and conditions, fees and charges may apply. Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian credit licence 234945. Presented by Commonwealth Bank
Updated 26 Mar 2025
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