SQM Research Boom and Bust Report 2025: What’s Going to Happen in 2025?

SQM Research Boom and Bust Report 2025: What’s Going to Happen in 2025?

Australia’s property market is undergoing rapid change, and SQM Research’s latest Boom and Bust Report offers essential insights every investor must know. With the RBA’s recent rate cut in March, we’re now following the path outlined by Louis Christopher as "Scenario 3" — a forecast that could dramatically reshape investment strategies across the country.

The numbers speak for themselves. Perth is leading the charge with projected growth of 15-20%, while Brisbane (11-16%) and Adelaide (10-14%) round out the top performers. Even historically slower markets like Melbourne (2-6%) and Sydney (3-7%) are expected to see positive returns. What’s particularly significant is the banking sector’s response, with most major institutions predicting further quarterly rate cuts, possibly reducing rates by up to one full percentage point over the next year.

This shifting landscape presents a rare investment opportunity. As holding costs decrease and rental yields remain strong due to the ongoing rental crisis, investors who act quickly, before the return of broader market competition, stand to reap substantial rewards. Additionally, the potential resolution of the Ukraine conflict, with talks of a 30-day ceasefire, could ease inflationary pressures, further supporting this positive outlook.

For those considering property investment, the message is clear: the time to act is NOW. Take advantage of these changing conditions, position yourself for future growth, and secure your financial freedom before competition intensifies.

Chapters

• 0:00 Introduction to SQM's Boom and Bust Report
• 2:15 Analyzing the Four Scenarios
• 3:05 Scenario 3: Capital City Growth Predictions
• 5:17 Ukraine Ceasefire Supporting the Scenario
• 6:05 Future Market Shifts and Opportunities
• 7:19 Investment Outlook and Rate Reduction Benefits

Transcript

Speaker 1: 0:00

Welcome back to another episode of the Taylor Property Wealth Podcast. My name is Casey Taylor, I'm the host of the podcast and in today's episode we're going to be talking about the boom and bust report from SQM Research, and this is from Lewis Christopher, who breaks down every year the boom and bust report and what he predicts is going to happen for that year, and normally breaks down a couple of different scenarios that can take place, based on the environment and based on other bits and pieces. And already we're midway through March at the time of recording this, and there's been a couple of things that have happened that have eliminated some of the possible scenarios that he's put forward. So today we're going to be taking a look at the scenario that is most likely going to transpire now, and that is because we have, in the first quarter of this year, already seen that rate reduction of 0.25% from the RBA. So we're going to break that down. And then what's also taking place at the moment and this is very brief information, I haven't gone very deep into it. However, there is another piece of this scenario that is starting to unfold and that's that there is now Ukraine accepting a 30 day ceasefire. So that's in the works and that's part of this scenario, so let's get into it. So in this report it's over 100 pages, this report, and it's very in-depth of all of the capital cities.

Speaker 1: 1:34

Now there was scenario one, two, three and four. Now just quickly, scenario one was based on a 25% to 50% rate cut in mid in mid 2025, population growth to continue at 500,000 and no new inflationary outbreaks. Scenario two was no rate cut for 2025. Population growth continues at that 500,000 and no inflationary outbreak. Number three, which is the rate cut in the march quarter and population growth to continue at 500 000. And scenario four population growth falls to less than 400 000 people, no rate cut and commodity prices remain stable. So, straight off the bat, we can cut out scenario two and we can cut out scenario four because we have already seen the rate reduction take place. Scenario one that is factoring a rate reduction midway through the year. So still not typically going to be that scenario either, but it does kind of depend on what rate cuts we do continue to see throughout the year.

Speaker 1: 2:41

Majority of the big four, apart from one, are predicting that we will see a 0.25% rate reduction each quarter for the remainder of this year. They're really starting to shift their predictions. So it will be interesting to see what takes place. But because of those couple of things that are going on, we are going to really break down scenario three of this boom and bust report from sqm research. Okay, so rate cut in the march quarter. That's taken place. Population growth to continue at 500 000.

Speaker 1: 3:13

What the predictions are from lewis christopher is that perth will do 15 to 20% growth this year, brisbane is going to do 11% to 16% growth, darwin 6% to 10% growth, melbourne 2% to 6% growth, sydney 3% to 7% growth, adelaide 10% to 14% growth. And then we have Hobart 1% to 5% growth and Canberra 2% to 6% growth, with the average capital growth rate based on the capital cities of 6% to 10%. So obviously, depending upon that capital city is going to vary on what that growth does look like. But the three top performers for last year. They are now predicting with SQM's boom and bust report that Perth, brisbane and Adelaide are going to do minimum 10% capital growth. Now, last year didn't get it to a T, so these are just predictions. No one's got a crystal ball. However, it is interesting to look at this. In SQM research thrive off data.

Speaker 1: 4:22

Now, with this scenario mentioned, the rate cut is to occur in the first quarter. So, tick, that's already taken place. Population growth continues at 500,000. We will see how that transpires. We're still getting massive amounts of population growth into the country, so that demand is there nationwide for population growth and we know that a lot of that goes is the war ends in Ukraine. Like I mentioned, there is the talks of the ceasefire, the 30-day ceasefire. The US have been liaising with Ukraine so there might be a resolution there which is continuing to support the scenario that is taking place. So as time goes on, it will really shape as to what's ultimately going to take place.

Speaker 1: 5:17

Right, but if you're looking at some of those marketplaces, there's going to be some really solid performance there and that's the capital city as a whole. Once we break it down into local government areas in each of those places, some are going to perform above that, some might perform below that. There will be some shift in marketplaces as well. Right, we've seen Sydney and Melbourne really underperform. Melbourne has really underperformed over the last five years since COVID. So that is a marketplace that's going to start to shift. We did a podcast late last year and not quite. Melbourne is where it's at to start investing there, but things are going to start to ramp up there, we believe. With the rate reduction that's taken place, things will start to shift, so it's an important one to keep an eye on.

Speaker 1: 6:05

This is a pretty short and sweet one today, just a summation of that boom and bust report what the scenario that is looking like will most play out based on a couple of that boom and bust report. What the scenario that is looking like will most play out based on a couple of those metrics that are already taken place or in motion to support this scenario. It's exciting time as an investor. We're seeing those rates start to reduce. Like I said, the big four are now predicting each quarter we're going to see 0.25% rate reduction. So in 12 months time we might be sitting 1% lower in terms of our interest rate and holding costs, which is massive.

Speaker 1: 6:40

If you're holding an investment property or an owner-occupied property, or if you're out there and you're using leverage to your advantage and you might be in debt a couple of million dollars because it's really going to benefit you from that cash flow and because it's so tightly held, with rents and the rental crisis going on, over time you're going to see those gross yields increase based on your original purchase price, and that's really where that lending part comes into it and that cash flow and what you can maintain at that time of purchase.

Speaker 1: 7:14

If you're thinking of investing, now is a very exciting time as an investor. To get in, take action, take advantage, because over the next couple of months, once we continue to see those rate reductions, there's going to be a lot of people flooding back into the marketplace and in some of these areas that would just ramp up even more and for some of these areas that aren't quite hot enough yet, they will start to ramp up. So get in, take action, make educated decisions and purchase high-performing assets that are going to help you achieve financial freedom in the future. Hope you enjoyed this one. If you have any questions, reach out and we'll see you on the next episode.