Brisbane Property Market Outlook for 2025
Brisbane's property market showed remarkable resilience in 2024, ending the year with an annual growth rate of 11.2%. Despite this, the city experienced a slowdown in the latter half of the year, with quarterly growth easing to 1.3% by December, down from its April peak of 17.0% annually. This deceleration aligns with national trends, as affordability constraints, higher interest rates, and a rise in advertised stock levels have begun to weigh on demand.
Key Factors Influencing Brisbane in 2025
- A softening in property values nationally is expected to have limited impact on Brisbane due to its relative affordability compared to Sydney and Melbourne. However, interest rate cuts anticipated in 2025 could provide some relief to borrowers, increasing borrowing capacity and stabilizing demand in the local market.
Brisbane’s low levels of advertised stock, paired with sustained demand from interstate migration, should support price stability. While other markets like Perth are seeing increases in supply, Brisbane remains undersupplied, particularly in new housing. Construction constraints and elevated costs will likely continue to limit new housing delivery, keeping pressure on prices. Brisbane’s rental yields softened in 2024, with gross rental yields for units falling by 54 basis points. However, the city remains attractive to investors due to strong population growth and consistent demand for rental properties. The rental market may stabilize further in 2025, as affordability challenges and reduced migration trends ease pressure on tenants. Gross Yield 3.6% Rental markets also finished the year on a softer note, with the national rental index up just 0.1% in the month of December to be 0.4% higher through the December quarter and 4.8% higher over the calendar year. “This was the smallest December quarter rise in rents since 2018,” said Mr Lawless. “On a rolling annual basis, we haven’t seen an annual change this small since the 12 months ending March 2021, following the early COVID patch of weakness.”
What to Expect in 2025
While 2025 is unlikely to replicate the double-digit growth seen in recent years, Brisbane may experience modest gains as affordability improves, supported by rising incomes and lower borrowing costs.
- Affordability Improvements
Housing affordability, which reached record lows in 2024, should see some recovery in 2025. Income growth is expected to outpace house price growth, and interest rate cuts will reduce mortgage repayments. This combination may attract more first-home buyers to the market.
- Government and Policy Influence
Any adjustments to macro-prudential policies, such as a reduction in the mortgage serviceability buffer, could further boost borrowing capacity and buyer activity. Additionally, initiatives to increase housing supply could help alleviate some pressure on the market, though substantial impacts may take longer to materialize.
- Challenges for Developers
High construction costs and labour shortages will continue to challenge new housing projects, limiting the pace at which supply can catch up with demand. Federal and state government support may provide relief, but this is unlikely to fully address the shortfall in 2025.
Conclusion
The Brisbane property market is expected to remain stable in 2025, with modest price growth supported by a combination of improving affordability, low supply, and strong demand fundamentals. While the pace of growth will likely be slower than in 2024, Brisbane remains one of the most dynamic property markets in Australia, offering opportunities for both investors and homebuyers.