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Thinking about buying a 3-bedroom apartment in Sydney's Inner West? It’s a vibrant area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other suburbs like Surry Hills or Newtown where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Australia Property Pack.
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If property prices go up in Australia, how much would they increase by?
If real estate prices in Australia were to rise in 2025, the increase would likely be between 3% to 7% of their 2024 values.
Typically, real estate in dynamic markets like Australia appreciates by approximately 3% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Sydney for 850,000 AUD today, don't be surprised if it's priced between 875,500 and 909,500 AUD this time next year.
To give you a better understanding, here is a table that shows 7 types of Australian real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 3%, 5%, and 7%.
| Type of Property | Average Price in 2024 (AUD) | Price in 2025 (3% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Apartment (60 sqm / 646 sqft) | AUD 900,000 | AUD 927,000 | AUD 945,000 | AUD 963,000 |
| Modern Apartment (75 sqm / 807 sqft) | AUD 1,200,000 | AUD 1,236,000 | AUD 1,260,000 | AUD 1,284,000 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | AUD 2,500,000 | AUD 2,575,000 | AUD 2,625,000 | AUD 2,675,000 |
| Studio (30 sqm / 323 sqft) | AUD 450,000 | AUD 463,500 | AUD 472,500 | AUD 481,500 |
| Loft (80 sqm / 861 sqft) | AUD 1,600,000 | AUD 1,648,000 | AUD 1,680,000 | AUD 1,712,000 |
| Townhouse (150 sqm / 1,615 sqft) | AUD 3,500,000 | AUD 3,605,000 | AUD 3,675,000 | AUD 3,745,000 |
| Investment Property (50 sqm / 538 sqft) | AUD 750,000 | AUD 772,500 | AUD 787,500 | AUD 802,500 |
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If real estate prices go up in Australia, which areas are likely to see the biggest increases?
Today, people who want to move to Australia want the charm, but they also want modern conveniences and vibrant social scenes, which Surry Hills in Sydney delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Fitzroy in Melbourne has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Australian market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Surry Hills, Sydney | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Fitzroy, Melbourne | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Melbourne. |
| New Farm, Brisbane | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Docklands, Melbourne | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Paddington, Sydney | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| St Kilda, Melbourne | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Fortitude Valley, Brisbane | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Richmond, Melbourne | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Bondi Beach, Sydney | Medium-High | Its proximity to Sydney, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| West End, Brisbane | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Mosman, Sydney | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| The Rocks, Sydney | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Australia?
In 2025, Australian real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025, especially in cities like Sydney and Melbourne.
- Family-Sized Homes in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near major cities like Brisbane and Perth are seeing increased interest. Proximity to green spaces, beaches, and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In urban areas like Sydney, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Australia's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category.
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