Real Estate Market Newsletter – September 2025

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Dear Clients,

The Australian property market continues to show resilience, supported by easing interest rates and growing buyer activity. Here are the latest insights from the NAB Q2 2025 Residential Property Survey.

Market Sentiment on the Rise

  • The NAB Residential Property Index lifted to +44, well above average.

  • VIC (+36) and NSW (+46) show strong signs of recovery, while QLD (+62) and SA (+45) remain solid.

  • Confidence is up both short-term (+62) and long-term (+58) as interest rate cuts flow through.

👉 Overall, most professionals believe NSW and VIC are at the start of recovery, while QLD, SA, and WA are closer to market peaks.

Table: NAB Residential Property Index: States

House Price Outlook

  • National house price growth expectations:

    • +3.3% over the next 12 months (up from 2.3%)

    • +4.1% over 2 years (up from 3.1%)

  • Strongest outlook: QLD (4.6%) & NSW (4.2%)

  • Lowest outlook: ACT (2.8%) & VIC (2.5%), though VIC has improved from near zero growth earlier this year.

Table: Average Survey House Price Forecast (%) from NAB

Rental Market Trends

  • Rental growth is expected to accelerate:

    • +2.3% in the next 12 months

    • +2.9% over 2 years

  • The ACT (+5.4%) and TAS (+3.9%) lead short-term expectations.

  • Shortages remain most acute in WA, where rental stock is critically tight.

Table: Average Survey Rent Forecast (%) from NAB

Buyer Activity

  • First Home Buyers (FHBs) are back:

    • New housing: 40% share, highest since 2022.

    • Established housing: 34% share (up from 32.8%).

  • Owner occupiers remain dominant, though their share dipped slightly.

  • Local investors rebounded to 18.5%, near long-run averages.

  • Foreign buyers remain subdued at 3.3% established and 6.8% new housing, still well below historical averages.

Buyers: New Housing (% share)

Key Challenges for Developers

  • Construction costs (74%) remain the biggest hurdle for new projects.

  • Delays in planning permits (54%) are easing but still a barrier.

  • Affordability concerns have risen sharply (35% vs 15% in Q1).

 

Impact of Rate Cuts & Incentives

  • Industry professionals expect rate cuts to lift demand, especially from first-home buyers and owner-occupiers.

  • The Federal Government’s 5% deposit scheme is tipped to further boost first-home buyer demand.

 

What This Means for You

  • Sellers: Confidence and buyer demand are rising, particularly in NSW, VIC, and QLD.

  • Buyers: With rates easing and incentives improving, now may be the right time to enter or upgrade.

  • Investors: Expect stronger rental growth, particularly in tight markets like WA and QLD.