Why the Property Market Is Set to Boom, Not Crash

Australian property prices are set to skyrocket in 2025 – not collapse. The data doesn’t lie. 

A closer look at Australia’s housing market reveals a pressure cooker for growth. Predictions of a property crash overlook the hard facts of supply, demand, and affordability. 

Why Property Prices Are Rising, Not Falling 

• Construction industry insolvencies are up 21% year-on-year, cutting new housing supply.
• The government’s target is 240,000 homes annually, yet only 163,722 dwellings were built in 2024.
• Immigration remains strong with a net gain of 340,000 people, driving long-term demand.
• Shrinking household sizes require an extra 120,000 dwellings nationwide.

Market Evidence of Growth
 

• Properties are selling fast – just 15 days on average.
• Listing levels are 20% below the five-year average.
• Vacancy rates are at record lows: Adelaide 0.8%, Brisbane 1%, Perth 0.7%, Melbourne 1.8%.
• Three interest rate cuts in 2025 (0.75% total) have boosted buyer power, with more predicted by major banks.
• First-home buyer caps have increased (Brisbane from $700k to $1M), further fuelling demand.

Long-Term Security in Real Estate
 
Australia’s residential real estate sector is worth $11.56 trillion, with a low national LVR of 21%. Over the past 30 years, metro house prices have grown 453%, cementing property as one of Australia’s most reliable wealth-building strategies.
 
The Bottom Line
 
Those waiting for a property crash risk missing out. The fundamentals – limited housing supply, rising population, and increasing affordability from rate cuts – all point to continued property price growth in 2025 and beyond.
 
Smart investors who act on this data, not fear, will build significant wealth in Australia’s property market.
 

Chapters

• 0:00 Property Crash: Myth or Reality?
• 0:22 Supply and Demand Fundamentals
• 1:59 Migration and Construction Challenges
• 4:15 Interest Rate Cuts and Market Impact
• 5:36 Real Estate Value and Future Outlook
• 11:15 Taking Action in Today's Market

Transcript

Speaker 1: 0:00

The property market is going to crash. Is this a myth or is this true? In today's episode, we are going to be breaking down what we believe is going to happen in the property market over the next few years. My name is Casey Taylor, I'm the host of the podcast and we're going to get straight into it today on a number of different metrics that are going to influence what property does. Now, getting straight into the marketplace, we fundamentally have a supply and demand issue. We have less supply than there is demand and that is the pressure cooker for growth. So that is something super important to focus on. But we really want to break down a lot of the different metrics that influence that supply and demand and we're going to touch first on the construction industry and a lot of the collapses in the construction industry, because this leads through to our supply. Now there was 3,595 construction insolvencies in the 24-25 financial year, up 21% from the 23-24 financial year, which was at 2,977. So that number has increased significantly. 21% is a big increase and with those collapses there is less people out there building more supply. So there is going to be a negative impact on the supply coming through Now, when we have the federal government making a target of 240,000 homes per year to be able to meet their target over the next five years, that is going to be impacted and going to be less likely.

Speaker 1: 1:47

So 2024 building approvals was at 163,722 homes, so it's trending upwards. But with that 4.7%, is that going to result in that upward trend meeting that 240,000 homes? I don't think so. That upward trend meeting that 240,000 homes? I don't think so. And that's really what we need to help what's going on within the country and that high demand, with the supply not keeping up, really continues to push that growth.

Speaker 1: 2:39

Now the ABS data stats for overseas migration In the 22-23 year we had 536,000 people net gain into the country. The 23-24 year was 446,000, so a drop, and then the 24-25 year was 340,000, which is more closely aligned with the government's target of 335,000. So there's still a lot of people coming into the country, but less than there was a couple of years ago and that's obviously post-COVID. Those numbers were quite high and it's back in line with the target. But that's still a massive amount of people coming into the country where, like we discussed, we have those construction insolvencies. We don't have the supply keeping up. So that is a very crucial one holistically as a country that is going to put that pressure on prices. Now, listing levels are 20% below the five-year average and this was as per cotality in july 2025. I was actually looking at some data on some suburbs that we target and listing levels in some areas are down 50 compared to 12 months ago. So it it's really tightly held in some areas at the moment and that translates across to the suburbs as well. Median days on market at 15 days. So they're selling like that and this is what people don't get. I'm just going to wait is just ridiculous, because the pressure is there and they're going to continue to increase.

Speaker 1: 4:25

We have rate reductions that have now taken place in 2025, feb, may, august dropping in total 0.75% basis points. So debt is now cheaper than it was at the start of the year. We have more people taking action. They can now one purchase when they couldn't have, or they're now happy to go out and take action and purchase another investment property because holding costs have improved and we are seeing that in our business a lot.

Speaker 1: 4:55

Anz predict that there is going to be a rate cut in November, bringing the cash rate to 3.35. Cba predicting another cut in November 25 and another in Feb 26, bringing the cash rate to 3.35. Cba predicting another cut in November 25 and another in Feb 26, bringing the cash rate to 3.1 in Feb 26. Nab predict another cut in November and Feb, bringing the cash rate to 3.1 in Feb 26. And Westpac predict another cut in November 25 and March 26 and then one more in June 26, bringing the cash rate to 2.85%, due next year. So there's another couple of cuts most likely taking place. No one's got a crystal ball. However, it's trending in that direction. So that is going to mean more people out there buying and taking action.

Speaker 1: 5:48

Now, on top of that, we have, on the 1st of October, the increase to some of those first home buyer caps. At a lot of the metro locations their caps are increasing. So, for example, brisbane's increasing from 700 to 1,000. We've got Melbourne increasing from, I believe it is 750 to 900,000. So there's increases taking place which is going to continue to push that pressure on property prices in those marketplaces and that first home buyer is going to really drive some of that growth in demand. Now another important one is that the RBA predict that, due to the household average decreasing from just 2.6 people per home to 2.5 people per home. That is going to result in a demand and a requirement for 120,000 new dwellings. Now, if we need those additional new dwellings and then on the flip side we have those construction issues and we're not keeping up with the government's demand, that is further pressure on the supply and demand.

Speaker 1: 7:12

We've got historic low vacancy rates. So Adelaide is sitting at 0.8% in August 25, brisbane 1%, perth 0.7%. Melbourne it's at 1.8%. So still tightly held in a lot of those areas. And what happens with vacancy rates is a precursor for growth, because less stock drives rents higher and not everyone just needs to rent. They're choosing to rent. So what will happen is, as rents increase, they'll go out there and they'll purchase instead, and that creates more buyers in the marketplace. So it is a precursor, and this is where this is a story and a discussion for another day. However, I think we need to have some incentives in place for people to go out and purchase investment properties, because we continue to demonise landlords in this country. However, they are providing the supply that we need for our tenants, for our renters, to have more choices, and this is why that rental crisis is taking place and vacancy rates are so low. We try and demonize them, but it actually negatively impacts tenants and that's something that a lot of people can't grasp. A lot of people can't grasp Now.

Speaker 1: 8:43

The value of residential real estate, as per ABS in August 2025, is an estimated $11.56 trillion. Now, if you understand that and understand that some of the biggest companies in Australia are the big four banks, the government is always going to intervene. When property may correct, it will always intervene and we have confidence that property is going to continue to perform. Because of that, we are a country heavily reliant on residential real estate. If you understand that, you would have confidence in resi real estate and continue to invest. And you can just look at the history on property prices metro houses in metro locations over the last 30 years, as per catality, formerly known as core logic, in 2022 had an increase of 453 percent. So all you've got to do purchase. Today. 30 years time, you're going to have massive, massive uplift. Now it's not a guarantee that that same performance is going to take place, but history can help educate us. It's a lot less volatile than your shares, than the super, and we've seen so many things happen in that super space this year with people really losing out. There's a lot of major infrastructure projects in some of those large metro locations so that's going to continue to push local employment, income levels and demand for property in those areas.

Speaker 1: 10:16

Wages, as per the ABS, grew 3.4% in the June 25 quarter, so that's actually trending a little bit above inflation CPI index. So it rose 2.1% for the 12 months to June 2025 and was an increase of 0.7% for the quarter. So that's obviously a lot lower than it has been in the past and we're getting more in line with where it needs to be. That's why I've now experienced those rate reductions this year as well.

Speaker 1: 10:51

Now, this one's a little bit dated the data, however the lvr of australian residential real estate in november 24 it, at $11.1 trillion, had mortgages outstanding at $2.3 trillion. So we are only in a debt level of 21% LVR as a country, which is very, very low risk. If you've got a LVR of 21% and you're going to the banks, they will chuck money at you. Lvr of 21% and you're going to the banks, they will chuck money at you, obviously if you can service, but you're so low risk because of that equity position within the property. These are a lot of the metrics right now that are going to continue to put pressure on prices.

Speaker 1: 11:44

If you right now think you're going to sit on the fence and in 12 months time you're going to get a discount on property, like a lot of these people out there are, like all these people with profile pictures of their dog or their Holden Commodore, projecting negativity out there that property prices are going to crash you are going to be sorely mistaken. Property in the right locations will continue to perform. We are going to go through a boom in many locations because of this pressure cooker for growth. If you understand this, you are going to do well. Years ago, 2022, people were throwing out. Rates are increasing. Property prices are going to tank. Yet for many of our clients, they've done over 50 percent in a three-year period in some locations. Once you know where to look, once you understand those fundamentals, you will go out and take action and do very well.

Speaker 1: 12:37

I am personally still investing in property today, not only for clients, obviously, but for myself, because I understand the opportunity right now to continue to build my wealth base and get in those areas prime for growth as an investor. As an investor taking action, not talking about it, but simply doing it. You're going to do very well if you target those right locations. There is a lot of opportunity out there right now, so go out there, take action, understand this data, understand the pressure cooker for growth and you'll reap the rewards in the future. I hope you enjoyed this one. This is pretty data heavy on a number of different things that we kind of keep track of and look at, because this gives us a very clear understanding of supply and demand. High demand, low supply is that that scarcity aspect, and that scarcity leads to the pressure cooker for growth. Hope you enjoyed this one and we will see you on the next episode, see ya.