Buyer confidence stays strong in east coast capitals

NSW property to stay solid in FY25

REBAA’s NSW state representative, Linda Johnson, said the NSW market was ending FY25 while engaged in a “period of transition”.

“After a strong start, momentum has moderated in recent months, shaped by ongoing cost-of-living pressures, interest rate anticipation, global uncertainty and a lower-than-average supply landscape – 14 per cent below previous five-year average,” Johnson said.

Nevertheless, Johnson said that resilience had still persisted across the broader NSW market, with Sydney in particular reporting “modest, yet positive growth overall”.

“House prices increased by approximately 3–4 per cent over the year, while apartment values lifted slightly less, by around 2–3 per cent,” she said.

Johnson said that the premium property segment in NSW had notched up a strong performance, driven mainly by the more affordable end of the market.

REBAA’s data showed that annual growth across the regional housing markets of NSW ranged from 3–5 per cent, depending on location and property type.

Johnson said that growth was more stable within the state’s regional markets, and in some high-performing areas was stronger than in metropolitan areas.

“Lifestyle-driven demand, particularly in the Hunter Valley, Illawarra and parts of the Central West, kept prices elevated,” Johnson said.

“These regions benefited from relative affordability, improved infrastructure, and ongoing hybrid work arrangements,” she added.

She said that population movement from NSW’s metro to the regional areas was forecast to remain elevated over the year, as buyers increasingly seek out space and value at affordable prices.

Additionally, she said that planning reforms from the NSW government and infrastructure investment in Western Sydney and regional areas were reflective of the increasing trend of decentralisation across NSW.

While Johnson said the possibility of further interest rates could impact the performance of the NSW market, she highlighted that the state was set to enter FY 2025–26 with a “sense of cautious optimism”.

“Overall, while price growth may remain subdued in the short term, both capital city and regional markets are well-positioned for sustainable performance in the year to come,” she said.

Victorian property set up for success in FY25

REBAA’s Victorian state representative, Matt Scafidi, said that the 2024–25 financial year period had been a “dynamic and transitional period” for Melbourne’s property market.

“While it lacked the explosive growth seen in other states like Queensland and Western Australia, Victoria has remained a market of opportunity, particularly for discerning buyers with long-term outlooks,” he said.

Scafidi said that the current conditions in Victoria were a departure from the more cautious buyer sentiment that defined the early part of FY25.

“A series of interest rate rises, cost-of-living pressures, and tempered buyer demand saw vendors adjusting their price expectations, creating a more balanced playing field,” Scafidi said.

“This period provided ideal conditions for buyers, with more negotiable terms, reduced competition, and better value available in many Melbourne suburbs,” he added.

Scafidi said the increased migration into Victoria helped to boost demand for both rentals and entry-level homes over the financial year, yet unfavourable conditions saw many investors leave the state’s market.

“This year also saw many investors exiting the market, driven by rising costs, stricter tenancy regulations, and increased land tax obligations,” he said.

“While this placed further strain on the rental market, it also led to an uptick in available stock – particularly in apartment markets – opening up excellent opportunities for both home buyers and strategic investors.”

Alongside the elevated buyer confidence in Victoria, Scafidi said that the market’s comparative affordability has also helped to endear the state to buyers and investors alike.

“Melbourne’s relative affordability compared to other capitals, particularly Sydney and Brisbane, positions it as an attractive option for both local and interstate buyers,” he said.

“FY25–26 is shaping up to be a year of renewed opportunity, and for those ready to act, Melbourne remains a city rich in potential.”

Onwards and upwards for booming Queensland market

REBAA’s Queensland state representative, Joanna Boyd, said the Brisbane market performed strongly and was resilient throughout FY25.

“Despite the impact of inflationary pressure, interest rate uncertainty, and high cost-of-living concerns, Brisbane’s housing sector has remained remarkably resilient, driven by low supply, strong migration, and rising interest in the first home buyer and investor sectors,” she said.

Boyd said that Brisbane’s property values across the board had significantly lifted over FY25, and driven the market to be a prime player across the nation’s capital city markets.

“According to Cotality, Brisbane’s median house price crossed $1 million for the first time, settling at $1,000,422. Apartment values have also climbed significantly, with the median unit price now being $709,823,” Boyd said.

“The city is now Australia’s second-most expensive capital city property market by median price, sitting behind only Sydney,” she added.

Despite Brisbane’s new title, Boyd still observed significant buyer interest on the more affordable end of the spectrum.

“Demand remains strong for houses in the more affordable or high-growth markets, supported by a mixture of owner-occupiers and investors seeking value in a stabilising interest rate environment,” she said.

Looking at FY2026, Boyd said the factors underpinning Brisbane’s growth are unlikely to change quickly.

“A persistent undersupply of homes, strong population growth and a new wave of first home buyers and investors are expected to keep upward pressure on prices,” she said.

Boyd added that the continued infrastructure investment and long-term pipeline around the 2032 Olympic Games were further assurance of the Brisbane market’s continued prospects.

“While some moderation may occur if interest rates fall further or supply improves, the city’s core fundamentals remain strong, positioning Brisbane once again as a standout performer going into the 2025–26 financial year,” she concluded.