Fact checked
Australian house prices are set to surge by 2025 but there are opposing factors that are likely influence how things would turn out.
According to KPMG’s housing market forecast, house prices will rise nationally by 4.9% over the next nine months and then surge by 9.4% in the year to June 2025
Across the apartment segment, price growth will hit an average rise of 3.1% by next June and another 6% in the next 12 months.
The tables below show the projected gains in house and unit prices by 2025:
KPMG chief economist Dr. Brendan Rynne said even with elevated interest rates, the dominant force steering property prices in the short term will likely be limited supply — this is expected to lead to ongoing price increases in most markets throughout financial year 2024.
“House and unit prices will then accelerate further in the next financial year as dwelling supply continues to be limited, due to scarcity of available land, falling levels of approvals and slower or more costly construction activity,” he said.
The potential rate cuts moving into financial year 2025 are also likely to contribute to the growth in house prices.
However, Dr. Rynne said there are some factors on the opposite side, with mortgage stress being the most significant one.
“First-time buyers now need to use around half their earnings on mortgage payments — a significant rise from a third just three years ago,” he said.
Around $350bn of mortgages, or half of all fixed rate credit will expire this year, covering 880,000 Australian households.
Meanwhile, the remaining 38% of fixed rate credit, which includes about 450,000 loan facilities, will expire in 2024 and beyond.
“Some homeowners who previously locked in low rates might be unable to pay — and won't be able to refinance to a lower and competitive rate,” Dr. Rynne said.
Also read: Revealed: Key housing trends to watch out for
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $2,408 | Principal & Interest | Variable | $0 | $530 | 70% | Featured Online ExclusiveUp to $4k cashback |
| |||||||||
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% |
| ||||||||||
6.14% p.a. | 6.16% p.a. | $2,434 | Principal & Interest | Variable | $0 | $250 | 60% |
| ||||||||||
5.95% p.a. | 5.95% p.a. | $2,385 | Principal & Interest | Variable | $0 | $0 | 90% | |||||||||||
5.94% p.a. | 5.95% p.a. | $2,383 | Principal & Interest | Variable | $0 | $0 | 90% |
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