2025 kicked off with a rate cut, surging rental demand, and buyers returning to the market, but uncertainty still lingers.
With shifting interest rates, changing buyer behaviour, and evolving lifestyle preferences, both buyers and sellers are wondering what's in store. Whether you're planning to list your home, invest, or purchase your first property, understanding the trends shaping the market is essential.
Let's take a closer look at what's driving the property market this year to date, and how you can make informed decisions as we head deeper into 2025.
Interest Rates Are Stabilising – But Caution Remains
After a series of rate hikes over the past two years, the Reserve Bank of Australia cut the cash rate by 25 basis points to 4.1% in February 2025 – the first reduction since 2020. This move has offered some welcome relief to borrowers and helped restore buyer confidence.
That said, rates are still higher than they were pre-2022, so affordability remains a key concern, particularly for first home buyers and upgraders. The RBA has signalled a cautious approach moving forward, with no immediate plans for further cuts until inflation trends lower.
Buyers should ensure they're pre-approved and budget with flexibility in mind, as rate changes may still occur. Keeping across economic shifts will be key to navigating the lending environment ahead.
Demand Remains Strong in Lifestyle and Regional Areas
The shift towards remote work and lifestyle-focused living continues to influence demand. Coastal towns, hinterland regions, and well-connected regional hubs are seeing steady interest from buyers looking for more space, lifestyle perks, and affordability.
Areas like the Sunshine Coast, Ballarat, Toowoomba, and the NSW South Coast are outperforming some capital city markets, particularly in the family and downsizer segments.
Unit Markets Are Making a Comeback
After years of underperformance compared to houses, unit prices in many cities are stabilising and even rising. This trend is driven by affordability constraints and renewed interest in low-maintenance, well-located dwellings particularly among investors and younger buyers.
Investors are also returning to the market, driven by strong rental demand and low vacancy rates in metro areas.
What This Means for Sellers in 2025
If you're considering selling this year, timing and presentation will be key. While buyer activity has picked up, today's market is more price-sensitive and competitive than during the boom years.
Well-presented, realistically priced homes are moving quickly, particularly in suburbs with strong school zones, public transport, and lifestyle appeal. Vendors should work closely with their agent to price strategically and highlight features that align with current buyer priorities such as energy efficiency, outdoor space, and flexible living zones. In this climate, targeted marketing and standout photography can make all the difference.
What This Means for Buyers in 2025
With more listings coming to market and less intense competition than during peak periods, buyers have room to negotiate, especially if they're prepared, finance-ready, and clear on their goals.
It's a good time to take advantage of cooling pressure in some markets and re-engage if you've been sitting on the sidelines. First-home buyers should investigate available government grants, stamp duty concessions, and shared equity schemes. Investors should stay alert to pockets of high rental yield, particularly in outer-metro growth corridors and smaller cities offering solid infrastructure and population growth potential. Doing your homework now could lead to long-term gains.
Key Takeaways
- Interest rates have stabilised but remain elevated, plan your budget carefully.
- Lifestyle and regional areas continue to show strong demand.
- Unit markets are improving, offering opportunities for budget-conscious buyers.
- Sellers should focus on presentation and realistic pricing.
- Buyers can benefit from increased choice and softer competition.
Thinking of Buying or Selling in 2025?
Whether you're entering the market or looking to maximise your return, local expertise makes all the difference. Contact your local Century 21 agent for tailored advice and a free market appraisal.