Amid cost-of-living pressures and mortgage repayment stress, there has been some good news for homeowners.

Property prices have continued to rise for months on end across the nation.

In October, data from CoreLogic showed property values increased by 0.3% nationally. It was the 21^st consecutive month of price growth across the country.

Recently, Australia’s property market also reached a new milestone. For the first time ever, the total value of residential real estate climbed to $11 trillion, according to CoreLogic. Property values in Sydney, Brisbane, Adelaide and Perth are all currently at a record high.

So, will housing prices keep rising in 2025? Let’s take a look at what we know.

Price growth has slowed

Despite the Australian property market’s impressive track record of price growth for almost two years, there’s no doubt that momentum is slowing.

National property values increased by just 1% in the September quarter, which was the softest quarterly rise since March 2023. The annual growth rate also slowed to 6.7% from a high of 9.7% earlier in the year. All of this points to the fact that the market is cooling.

Experts say increased listing volumes and more cautious buyer behaviour are to blame.

“While the market remains resilient in many areas, the pace of growth more broadly has clearly decelerated,” CoreLogic Australia Economist Kaytlin Ezzy said recently.

“Buyers and investors are becoming more cautious, and the current lending environment is leading to more measured purchasing decisions.”

Supply and demand will play a role 

Whether property prices keep rising in 2025 will depend on advertised stock levels and overall supply versus buyer demand, among other factors.

When more properties are listed, buyers have more choice and there may be less urgency to purchase. There may also be more room for price negotiations, so prices can drop.

At the other end of the spectrum, when there are fewer properties available to purchase, stronger competition amongst buyers can cause prices to rise.

Perth, Adelaide, and Brisbane, for example, are still seeing advertised stock levels more than -20% below the five-year average for this time of the year. As a result, conditions are in favour of sellers.

Interest rates will likely have an impact

The Reserve Bank of Australia (RBA) has kept the cash rate on hold since November 2023, but it’s widely believed we’ll see a cash rate cut in the first half of 2025.

If interest rates do drop, people’s borrowing power will increase. Historically, when this has happened borrowers tend to spend to their maximum budget. This in turn can drive up property prices.

So, if the RBA cuts the cash rate, experts say we may see more competition return to the market, accelerating home price growth.

What does price growth mean for existing homeowners?

If your property’s value has increased, you may be sitting on untapped equity that you could be using to your advantage.

Maybe you want to buy an investment property in 2025? Or perhaps you’d like to drive up your property’s value even further with some home reno projects?

When you consider that some homeowners have seen their property’s value quintuple within the timeframe of a typical 30-year mortgage, it’s worth finding out how much equity you have. Get in touch for an estimate.

So, what’s the bottom line?

While there’s no crystal ball to predict which way the property market will go, many economists seem to think house prices will continue to rise, albeit more gradually in 2025.

A recent report by KPMG forecast house prices would rise nationally by 5.6% next year.

If you’re planning a 2025 property purchase, get in touch now to talk through your finance options.

When you’re new to buying property, choosing a home loan can be overwhelming. There are dozens of different lenders out there all offering different types of mortgages. So, which is right for you?

A mortgage broker can help you select the right home loan, based on your specific financial situation and goals. Here are some of the main options.

Principal and interest

Mortgages generally have two components. Principal is the amount of money you borrow. Interest is what you pay in order to borrow that money.

Your loan may be principal and interest, meaning you pay both back with each repayment. Otherwise, you may optb for an interest-only loan, but keep in mind that interest rates for interest-only loans tend to be higher than principal and interest loans.

Variable rate home loans

With a variable rate home loan, your interest rate may fluctuate in line with changes to the cash rate made by the Reserve Bank of Australia (RBA) and other factors. Some borrowers like variable home loans because of the flexibility they offer.

If there’s a cash rate cut by the RBA, for example, lenders may pass on the cut to your interest rate. Likewise, if the cash rate goes up, your interest rate will likely go up too.

Fixed rate home loans

If you choose a fixed rate home loan, your interest rate and repayments will be locked in, usually for a term of between one and five years.

This option is attractive to people who want the certainty of knowing exactly how much their repayments will be each week, fortnight or month. If interest rates are likely to rise, fixing your home loan can be beneficial. But if rates come down, you won’t benefit.

Keep in mind you may incur a fee if you decide to switch to a variable rate or refinance your home loan.

Split home loans

A split home loan offers the best of both worlds. It means a portion of your mortgage is variable, and the rest is fixed.

You’ll benefit if rates drop (on the variable portion), but will also be protected if rates increase (on the fixed component).

Other considerations

Basic versus standard

Basic home loans usually have fewer features than standard home loans, so they’re generally cheaper. Often they come with a variable interest rate.

Packaged loan

Packaged loans bundle a home loan with other financial products such as a credit card or transaction account. A discount may be applied to your home loan or fees on some or all of the products are waived for the life of the loan.

Usually, there’s an annual fee for a packaged loan.

Offset

An offset is when you have a transaction or savings account linked to your mortgage, and the balance is offset against your loan amount.

Say you have $50,000 in the offset and a loan balance of $500,000. You’d only pay interest on $450,000.

Redraw facility

A redraw facility allows you to make extra repayments on your home loan. These additional funds can be accessed – or redrawn – if you need them, but in the meantime, the money in your redraw facility reduces the interest you pay.

Line of credit

If you need to make the occasional big-ticket purchase for renovations or a holiday, a line of credit can be useful. Think of it like a credit card that’s secured by your property. You only pay interest on the funds you use.

Low-doc loans

Low-doc loans require less financial documentation to prove your income, assets and liabilities than a standard loan. They’re often used by self-employed borrowers or people with other borrowing hurdles.

These types of loans usually come with a higher interest rate than a standard mortgage and may include terms that restrict borrowers.

Ready to get started?

As your finance broker, we’ll line you up with the right home loan for your specific needs. Get in touch today and let’s chat through your requirements.

When you rent out your investment property, you can choose to manage the property yourself or get a professional property manager to do the hard yards for you.

The key benefit of getting someone else to manage your property is the convenience factor. You won’t be the one organising tradespeople if the property floods or the heater blows up.

A professional property manager can help maximise your returns by finding high-quality tenants, conducting thorough background checks, and ensuring their financials are sound, all while minimising vacancies.

Property managers offer a range of services, which may include:

• Rent advice
• Leasing expertise and advertising services
• Management of contracts
• Advice about tenancy legislation
• Inspections and hands-on management of your property.

Here are some tips for choosing the right property manager.

Do your homework

Research which property management companies service the area where your investment is located. You may opt for a full-service real estate agency or use a dedicated property management company.

Make sure you read their customer reviews, even if they’ve been recommended by family and friends. That’ll give you an idea of how others have found their services and what you can expect.

Stick to local professionals

A local property manager is likely to have a solid understanding of the suburb’s demographics, the kinds of tenants you’ll attract and the right rent to charge.

This kind of local knowledge is extremely valuable when it comes to property management and will help you make informed decisions.

Make sure you understand the fees

Most property managers charge a fee based on a percentage of the rent. Others charge a flat fee amount.

There may be administrative fees, leasing fees at the start of a tenancy (usually a couple of weeks’ rent), advertising fees and additional charges for lease renewals.

Make sure you understand the fee structure and what you get for your money.

See how reachable they are

When something goes wrong with your property, you need to be able to reach your property manager fast. Test the waters and see how easy they are to communicate with.

Give shortlisted property managers a call and see how knowledgeable they are and whether they’re pleasant to deal with.

Do they only respond via email or text? Do they take a millennium to get back to you? Does their communication style work for you?

Don’t be afraid to ask questions

There are no silly questions, so ask prospective property managers anything you feel is relevant.

• What services do they provide?

• How do they manage maintenance tasks?

• What sort of properties are in their portfolio and how many?

• How do they manage rental payments?

• How often do they do inspections?

• Will they let you know about legislative changes that could affect your rental?
• Asking lots of questions will help you choose the right property manager for your needs.

Let’s chat

If you’re in the market to buy an investment property, we can assist with the finance side of things. Get in touch today to talk through your options.