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In 2025, the real estate market is likely to be influenced by factors including interest rate movements, election uncertainty, a continued environment of subdued listings, and further growth in the regions. How agents and businesses prepare and adapt will be critical to the value proposition they provide their customers.
Some of the factors we anticipate will shape the market in 2025 will mirror those which influenced the market this year, but it’s how those trends will evolve that agents must be ready for.
Sustained higher interest rates mean tougher lending conditions to dampen buyer activity in 2024, but the potential for a downward shift in rates next year can encourage more buyers out of the woodwork. This may include first home buyers, for whom affordability and lending criteria have proven key constraints.
Investor activity remains volatile. New landlord legislation is discouraging some investors but softening prices in some capitals may start attracting others, and yields remain strong on the back of the rental accommodation shortage.
Though listing levels are subdued this year, pent-up demand remains strong, fuelled by population growth and the housing undersupply. While competition has driven up demand for well-priced properties, vendors remain cautious, and this drives up competition between agents. Looking ahead, much will depend on an agent’s ability to provide comfort to vendors to pursue a sale strategy.
This year, we’ve witnessed the resilience of markets in well-located, lifestyle-focused regional areas, and this can be expected to continue as buyers, perhaps price out of metropolitan areas, seek better.
We’ve also seen election uncertainty contribute to a wait-and-see approach, which is likely to flow into 2025, however once an election outcome is known, the market will respond. Again, agents need strategies in place now to prepare for this eventuation.
In forward planning, there’s so much to consider. Agents evaluating their 2024 performance against the ebb and flow of these variables, and whose performance has been impacted in perhaps unforeseen ways, have the opportunity to get back on the front foot in 2025.
To do so, there are numerous strategies they can implement now, if they haven’t already. Next year shapes as a challenging market but there will be opportunities to capture.
So how do agents prepare?
Leading brands will have resources in place for agents to develop effective, all-encompassing strategies which comprehensively cover these different areas and give them the best chance of success in 2025. To agents, the message is simple: if you haven’t yet prepared, this needs to happen now.
Otherwise, if 2024 didn’t deliver the results you had hoped, you might find that history repeats itself.
Angela Avgerinos is Laing+Simmons head of network performance.
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