10 insights into the investment property market

Rents Picking Up Pace Again: Rental growth has re-accelerated in early 2025, reversing the late-2024 slowdown. According to PropTrack, the national median advertised rent rose 1.6% in the March quarter, reaching $630 per week—a 5% annual increase that’s added $1,560 to yearly rental costs for tenants. Capital city rents climbed to $650 p/w, while regional rents held steady at $550 p/w. PropTrack also highlighted capital city suburbs where rents have either dropped or remained flat over the past year, and suburbs where it’s now cheaper to buy than rent.

Annual rental growth hits four-year low: National rents rose 1.7% over the March 2025 quarter, according to CoreLogic’s Quarterly Rental Review. However, the uptick was largely seasonal, with the rise in rents over the three months to March marking the slowest Q1 growth since 2019 (1.0%). Also for the first time since 2019, combined capital city house rents remained unchanged for three consecutive quarters, with annual growth easing to a four-year low, according to Domain’s Rent Report for the March 2025 quarter. While unit rents across the combined capitals re-accelerated, the pace of growth moderated, recording the slowest March quarter increase in four years.

Rents are going up faster: Over the past two years, they’ve jumped by 14.2% – that’s more than twice the general inflation rate of 6.6%, says Money.com.au. This rise includes a 7.3% increase in 2023 and another 6.4% in 2024. The last time we saw rent grow this much was back in 2007–08 during the global financial crisis, when it reached 8.4%. If things keep going the same way, rents could go up another 18% by 2030.

Home prices have gone up nearly 50% in the past five years, making it harder than ever. CoreLogic’s April Housing Chart Pack showed that housing values across the country jumped by 39.1%, which means the median home is now about $230,000 more expensive. PropTrack’s data also shows prices rose by 0.27% in March alone, bringing the yearly increase to 3.91% and a total rise of 48% over five years. The average home now costs $799,000 nationwide, with city homes averaging $865,000 and regional homes around $663,000. CoreLogic also reported that housing has become even less affordable, with the average household needing to spend at least six times their yearly income to buy a median-priced home.

Adelaide has now joined Sydney, Melbourne, Brisbane, and Canberra, with the median house price topping $1 million. Perth is expected to hit this milestone by the end of 2025, according to Domain’s House Price Report.

Sale: Across the country, house asking prices went up by 0.8%, while unit prices rose by 0.7%, leading to a total increase of 0.8% in March. SQM Research also reported that the number of homes listed for sale nationwide grew by 0.9% in March, reaching a total of 251,605 properties.

Building approvals showed a slight dip, with the total number of dwellings approved dropping by 0.3% to 16,606 in February, after a 6.9% increase in January. Additional data from the ABS revealed that building commencements fell by 4.4% in the December 2024 quarter. The HIA reported that 168,050 new homes started construction in 2024, marking the lowest level in more than ten years.

Investors making a comeback. Investor loans jumped 22% across the country in the past year, far outpacing the 6% growth in loans for owner-occupiers, according to Money.com.au’s Mortgage Insights report. Projections show that over 234,000 investor loans could be issued in 2025.

RBA stays put as Trump’s tariffs create uncertainty. At its meeting on 1 April, the RBA decided to keep the cash rate at 4.10%. While some financial markets expect a rate cut in May, the RBA has raised concerns about global economic uncertainty and the possibility of a global trade war, which could influence the May decision. API reported on the potential impacts of the tariffs, while Property Update discussed how the tariffs could benefit the Australian property market.

Property need-to-know. More higher-income households are choosing to rent. A third of people now prioritize their pets when searching for a new home. Younger generations are increasingly opting for private sales, co-ownership, and apartment living. Areas with high LGBTQ+ populations are seeing property prices grow faster than average. For every 10 decibels of aircraft noise, property values can drop by up to 9%. Properties near ferry and rail services tend to increase in value. New homes are a more affordable housing option in five Australian states. Energy efficiency is now more important to buyers than having a large backyard. Renovations may not add as much value as people think. Prestige Australian waterfront homes remain some of the most valuable and in-demand properties globally.