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Australia's property market in September 2025 presents a compelling case for buyers, with steady price growth, falling interest rates, and strong rental demand creating favorable conditions.
The Australian residential property market is experiencing a balanced recovery phase, supported by population growth, employment stability, and government incentives that make homeownership more accessible than it has been in recent years.
If you want to go deeper, you can check our pack of documents related to the real estate market in Australia, based on reliable facts and data, not opinions or rumors.
Australia's property market shows strong fundamentals with median house prices at $912,563, steady growth forecasts of 4-6% annually, and rental yields averaging 3.74% nationally.
Government incentives like the Help to Buy scheme and falling interest rates (current RBA rate at 3.6%) create favorable buying conditions, while tight vacancy rates (1.2% nationally) support rental income potential.
| Market Indicator | Current Status (Sept 2025) | Trend/Outlook |
|---|---|---|
| Median House Price | $912,563 (National) | 4-6% annual growth forecast |
| Interest Rates | RBA 3.6%, Variable 5.24-5.59% | Further cuts expected |
| Rental Yield | 3.74% (National average) | Improving due to tight supply |
| Vacancy Rate | 1.2% (National) | Declining, tight market |
| Government Support | Help to Buy scheme active | Enhanced incentives available |
| Market Liquidity | Days on market decreasing | Strong buyer demand |
| Supply Conditions | Apartment completions down 40% | Undersupply supporting prices |
What's the current median house price in the city or region I'm considering?
Australia's median house price stands at $912,563 as of August 2025, with significant variations between capital cities and regional areas.
Capital city median prices average $1,044,867, while regional areas are more affordable at $703,894. Sydney leads with the highest median prices, followed by Melbourne and Brisbane.
Major city breakdowns show Sydney houses averaging around $1.3 million, Melbourne at approximately $950,000, Brisbane at $850,000, and Perth experiencing rapid growth with prices around $750,000. Regional Queensland and Western Australia offer the most affordable entry points.
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How much have property prices in Australia risen or fallen in the last 12 months?
Property prices across Australia rose approximately 1.9% to 6.5% in the last 12 months, depending on the specific city or region you're targeting.
Perth led the growth with over 10% increases, while Darwin and Hobart showed more modest gains of 1.4%. The national average growth of 1.9% reflects a stabilizing market after previous volatility.
Capital cities generally outperformed regional areas, with Sydney and Melbourne showing steady 3-4% growth. This growth pattern indicates a maturing market with sustainable appreciation rather than speculative bubbles.
Regional areas in Queensland and Western Australia experienced stronger growth due to interstate migration and mining sector recovery.
What are the current mortgage interest rates and how do they affect monthly repayments?
The current RBA cash rate sits at 3.6% following three rate cuts in 2025, with standard variable home loan rates from major banks averaging between 5.24% and 5.59%.
For an average mortgage of $912,563 at 5.3% over 30 years, monthly repayments are approximately $2,773. This represents a significant portion of median household income but remains manageable for qualified borrowers.
Fixed rates are currently available between 4.8% and 5.2% for 1-3 year terms, offering payment certainty during the rate-cutting cycle. Many economists expect further rate cuts through 2026.
Lower rates have increased affordability by approximately $200-300 per month compared to peak rates in 2024, though monthly repayments remain substantial for most borrowers.
How much rent could I realistically expect if I rented out the property today?
Median national rent in 2025 is $685 per week for houses and $675 per week for apartments, though this varies significantly by location and property type.
Capital city rents typically range from $565 per week in Melbourne and Adelaide to $745 per week in Sydney for two-bedroom units. Three-bedroom houses command higher rents, often $800-1,200 per week in major cities.
Regional areas offer lower rental returns but also lower purchase prices, with typical rents ranging from $400-600 per week for houses. Popular coastal and mining regions can achieve premium rents.
Rental growth has been strong, with many areas seeing 8-12% annual increases due to tight vacancy rates and population growth driving demand.
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What's the average rental yield in the specific area I'm looking at?
The average national rental yield in Australia is 3.74%, with significant regional variations that can impact your investment returns.
| City/Region | Gross Rental Yield | Property Type |
|---|---|---|
| Sydney | 3.0% | Mixed residential |
| Melbourne | 3.7% | Mixed residential |
| Brisbane | 3.6% | Mixed residential |
| Perth | 4.2% | Mixed residential |
| Darwin | 6.7% | Mixed residential |
| Regional Queensland | 6.0-9.0% | Houses and units |
| Regional Western Australia | 5.5-8.5% | Mining town properties |
Are vacancy rates in that city going up or down right now?
Vacancy rates have declined significantly across Australia, with the national vacancy rate falling to just 1.2% in July 2025, the lowest level in years.
Most capital cities now have vacancy rates below 1.6%, indicating an extremely tight rental market. Sydney sits at 1.1%, Melbourne at 1.4%, and Brisbane at 1.3%.
This declining trend signals strong rental demand and limited supply, which benefits landlords through higher rents and reduced vacancy periods. Properties in desirable locations are often leased within days of listing.
The tight market is expected to persist through 2026 due to continued population growth and limited new rental stock coming online.
What government incentives or tax benefits could I qualify for if I buy this year?
The Australian government has introduced several significant incentives for property buyers in 2025, making homeownership more accessible than in previous years.
- Help to Buy Scheme: From October 2025, eligible buyers can receive up to 40% equity contribution from the government for new homes (30% for existing properties), requiring only a 2% deposit.
- First Home Buyer Stamp Duty Relief: Victoria offers full exemption for properties up to $600,000, with concessions up to $1 million. Similar schemes operate in other states.
- First Home Buyer Mortgage Tax Deductibility: New buyers may deduct mortgage interest for up to 5 years if living in the property as their primary residence.
- Build to Rent Tax Incentives: Investors in qualifying developments benefit from lower withholding tax (15%) and accelerated depreciation.
- State-specific grants: Additional first home buyer grants ranging from $10,000 to $25,000 depending on your state and circumstances.
What's the forecast for population growth and job opportunities in that region over the next five years?
Australia's population is growing strongly, with net overseas migration driving housing demand and creating robust employment opportunities across multiple sectors.
Job vacancies rose 2.9% quarter-on-quarter in May 2025, indicating a resilient employment landscape. Technology, healthcare, construction, and professional services sectors are experiencing particularly strong growth.
Major cities like Sydney, Melbourne, and Brisbane continue to attract both domestic and international migrants, while regional centers benefit from tree-change and sea-change trends accelerated by remote work capabilities.
Government infrastructure investments, including transport projects and renewable energy developments, are creating employment hubs in previously undervalued regions, supporting long-term property demand.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How does the cost of owning compare to renting the same type of property in that area?
Owning property involves higher upfront costs but offers long-term wealth building benefits that renting cannot provide.
Monthly ownership costs include mortgage repayments (typically $2,500-4,000 for median-priced properties), council rates ($1,500-3,000 annually), insurance ($800-1,500 annually), and maintenance (1-2% of property value annually).
Renting the same property typically costs 20-30% less monthly but provides no capital growth or tax benefits. Current median rents of $685-745 per week translate to $35,620-38,740 annually.
Tax deductions for mortgage interest, depreciation, and maintenance can significantly reduce the net cost of ownership for investors, while owner-occupiers benefit from capital growth and stability.
What's the outlook for property prices in Australia over the next two to three years according to major banks and economists?
Major Australian banks and economic institutions forecast steady property price growth of 4-6% annually through 2027, supported by continued rate cuts and strong migration.
ANZ, Commonwealth Bank, and HSBC predict price rises between 4% and 11% over the next 18-24 months, with most estimates clustering around 6-8% for well-located properties.
The outlook is underpinned by housing supply constraints, population growth, and improving affordability as interest rates normalize. Economic stability and employment growth support sustained demand.
It's something we develop in our Australia property pack.
Are there any signs of oversupply in the market, like too many new apartments or housing developments?
Australia is experiencing undersupply rather than oversupply, with apartment completions plunging by 40% since 2020 and new construction failing to meet demand.
New apartment developments are increasingly skewed toward luxury units, creating a shortage of affordable housing options. This supply-demand imbalance supports continued price growth.
Regional areas show better supply balance, but major cities face critical shortages. Government planning approvals have increased, but construction timelines mean new supply won't materialize for 18-24 months.
The undersupply situation particularly benefits existing property owners and creates opportunities for investors willing to hold properties medium to long-term.
How easy would it be to sell the property quickly if I needed to exit in the next one to two years?
Selling property in Australia's current market should be relatively straightforward, with average days-on-market decreasing across leading cities and strong buyer demand evident.
Well-presented properties in desirable locations typically sell within 30-45 days, while premium properties may sell even faster. Regional markets may take 60-90 days but still show good liquidity.
The combination of low interest rates, government incentives, and limited supply creates favorable selling conditions. Properties priced correctly for their market typically attract multiple buyers.
However, exit strategies should account for selling costs (agent commissions 2-3%, legal fees, marketing costs) and potential capital gains tax implications for investment properties held less than 12 months.
It's something we develop in our Australia property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Australia's property market in September 2025 presents a compelling opportunity for both investors and owner-occupiers, with favorable fundamentals supporting sustainable growth.
The combination of government incentives, falling interest rates, tight rental markets, and undersupply conditions creates an environment where well-researched property purchases are likely to deliver positive returns over the medium to long term.
Sources
- Your Mortgage - Median House Prices Around Australia
- Global Property Guide - Australia Price History
- KPMG - House Prices to Rise Gradually
- RealEstate.com.au - Big Banks Forecast
- Commonwealth Bank - Interest Rates
- CoreLogic - Rental Review Report
- SQM Research - National Vacancy Rates
- Australian Government Budget - Housing
- Australian Bureau of Statistics - Job Vacancies
- LinkedIn - Apartment Completions Analysis
-Australia Stamp Duty: What Will You Pay
-Australia: Fixed or Variable Mortgage Better
-Australia: Are Apartments Better Investments Than Houses
-Australia Capital Gains Tax Explained
-Australia Negative Gearing: Who Benefits
-Australia Land Tax: What Investors Should Know
-Australia: Are Short Term Rentals Still Profitable
-Australia: Co-buying a Home - Pros and Cons
-Australia: Rent Versus Buy - What Makes Sense
-Australia: First Home Buyers Common Mistakes