(April 2025 Blog) Shifting property market offers renewed optimism and opportunities

The Australian property market is experiencing significant shifts as interest rates fluctuate and homebuyer sentiment evolves. 

As the market adapts, there are emerging opportunities for those looking to invest in both the general and luxury sectors.

Homebuyer sentiment in Melbourne improves after rate cut

A notable shift in homebuyer sentiment has been observed in Melbourne, spurred by the February rate cut. According to the Westpac–Melbourne Institute Consumer Sentiment Index, homebuyer sentiment in Victoria increased 15.3% between January and February to 106 points. With 100 considered neutral, anything above that is optimistic, indicating buyers in the state are more positive about the market. 

With borrowing costs easing slightly, more buyers are re-entering the market. This renewed buyer interest has also contributed to a rebound in prices, with CoreLogic data showing Melbourne’s dwelling values increased 0.4% from January to February. This was the first month-on-month growth recorded in 10 months.

With this increase potentially indicating the start of a Melbourne rebound, the city offers good opportunities for buyers who want to get in ahead of possible future price growth. Also, with prices having stagnated over the last 18 months, Melbourne’s median dwelling value($772,561) is relatively affordable compared to other capitals like Sydney ($1,186,459) and Brisbane ($894,425).

However, while sentiment is improving, market conditions remain complex, with new challenges and opportunities emerging across different parts of the country.

Listings up, but not in all capitals

One key shift in the market is the increase in property listings, though this trend isn’t consistent across all capital cities. According to SQM Research, between January and 2025, the total number of listings available in Perth and Darwin declined by 0.9% and 1.6% respectively. 

In the other capitals, listings grew with Sydney leading the way up 11.6%. This was followed by Canberra (up 8.3%), Melbourne (up 5.5%), Adelaide (up 4.8%), Brisbane (up 1.5%) and Hobart (up 1.1%).

Looking ahead, the market will slow down over the April public holiday period. But, for buyers ready to enter the market now, more listings could be good news as it means more choices, less competition and more chances to negotiate with sellers.

How has the market changed since the Covid-19 pandemic?

These changes could mark a new phase for the Australian housing market, which has evolved significantly since the COVID-19 pandemic. 

Since the pandemic was declared in March 2020, national home values have surged by 38.4%, adding $227,000 to the median dwelling value, CoreLogic analysis shows.

This growth, however, has not been linear. After an initial 1.7% drop in early 2020, the market rebounded sharply, rising 33.1% between July 2020 and April 2022. This was fueled by low interest rates, government stimulus and shifting migration patterns. 

But, when the Reserve Bank of Australia began increasing interest rates in 2022, the market faced a 7.5% decline, but by February 2023, values began climbing again, up 14.5% to the end of October 2024.

Recently, growth has slowed, with values levelling off due to affordability pressures and stabilising population growth. 

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Australia’s luxury property market more affordable than other global cities

One segment that continues to perform strongly is the luxury property market, thanks in part to its relative affordability.  

According to The Wealth Report 2025 from Knight Frank, US$1 million will buy 45sqm of luxury real estate in Sydney, 87sqm in Melbourne and 119sqm on the Gold Coast. In contrast, the same amount of money would purchase only 19sqm in Monaco, 22sqm in Hong Kong and 32sqm in Singapore.

While luxury property prices in Australia have increased in recent years, particularly in cities like Perth and Brisbane, these markets still offer more value compared to international hubs. For instance, Perth saw a 5.3% growth in luxury property prices in 2024, leading the nation.

With a moderation of price growth expected in 2025, now may be an opportune time for buyers seeking to capitalise on the ongoing value offered by Australia’s luxury real estate market.

Looking to buy a new property? Whether you want to capitalise on Melbourne’s rebounding market or invest in Australia’s luxury market, as an expert buyers agency, A Game Property Advisory can help you secure a quality property at a fair price. Get in touch with Jim by calling 0422 446 170 or emailing jim@agameadvisory.com.au.