The Australian property market is poised for a notable shift in 2025, with apartment price growth set to outpace that of houses in key cities like Brisbane, according to recent forecasts from Domain.
This trend is driven by affordability pressures and constrained borrowing capacity, leading more buyers to explore the unit market as house prices continue to climb.
In Brisbane, apartment values are expected to rise by up to 9%, outpacing the predicted 7% growth for houses. Similar trends are anticipated in other cities, with Sydney, Perth, and Adelaide seeing apartment price growth match that of houses at 6%, 10%, and 9%, respectively.
Nicola Powell, Domain’s Chief of Research and Economics, attributes this shift to escalating home values, limited borrowing power, and the ongoing undersupply of properties. She noted, “High interest rates and stretched affordability will continue to put downward pressure on prices next year, but the ongoing undersupply will help limit the impact.”
Wealthy downsizers are also driving demand for premium apartments, lifting median unit prices in higher-end markets. However, Tim Lawless from CoreLogic cautions that this may be a short-term trend, as apartment supply tends to surge in response to demand, potentially tempering price growth over the medium to long term.
Looking ahead, affordability will remain a critical challenge. Nationally, house prices are forecast to rise between 4% and 6% in 2025, while units are projected to increase by 3% to 5%. Brisbane and Adelaide are on track to cross the $1 million median house price threshold, reflecting broader affordability pressures across the nation.
For buyers, strategic planning is key to navigating this evolving landscape. Whether considering apartments as a stepping stone or targeting emerging suburbs, adapting to market conditions will be essential.
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