Australia Real Estate Prices Set to Soar in Two-Speed Market

Get the latest forecast on Australia real estate prices, with record growth expected in most markets but varying rates of increase.

Australia real estate prices are expected to soar in the coming 12 months, with the majority of regions across the country predicted to reach record levels. The price boom is anticipated to impact both house and unit prices, with only a few areas expected to see slower growth rates or even a decline. This forecast may come as unwelcome news to potential home buyers, especially as existing homeowners are already struggling to keep up with mortgage payments.

According to CoreLogic, home loan arrears reached 1.6 per cent in the March quarter, marking the highest level since Q1 2021. Perth, Adelaide, Sydney, and Brisbane are projected to lead the price gains, setting new records in the process. Additionally, regions such as the Sunshine Coast, Gold Coast, and other regional areas are also expected to see house prices reach record highs.

By the end of the financial year 2025, house prices in Sydney are forecasted to surpass $1.7 million, while Perth, Brisbane, and Adelaide are likely to join the million-dollar club. In the unit market, Sydney, Brisbane, and Adelaide are expected to lead the price gains, with unit prices across various cities and regions reaching record highs.

Despite the optimistic outlook for property prices, there are concerns about the increasing number of property listings, which could potentially ease price pressures. The correlation between listings and price growth is evident, with more modest markets experiencing a significant rise in listings.

As recent data indicates, there is a growing divide between major cities like Melbourne and Sydney, and smaller cities such as Canberra, Darwin, and Hobart, compared to fast-growing cities like Adelaide, Perth, and Brisbane. Investors in the unit market also need to be wary of rising strata costs, which could impact their investment decisions.

On a different note, the Australian Taxation Office (ATO) recently released a list of the top 10 wealthiest suburbs in the country, based on residents' average taxable income. Surgeons topped the list, followed by other medical practitioners, as well as professionals in financial, legal, engineering, and management fields. Seven of the top 10 postcodes were in NSW, with Sydney's Double Bay claiming the top spot with an average taxable income of $354,308.

Overall, the Australia’s real estate market is expected to see significant growth in the coming months, but there are factors such as increasing listings and rising strata costs that could impact the market dynamics. Despite these challenges, certain suburbs continue to thrive, attracting high-earning residents and maintaining their status as the wealthiest areas in the country.