Should you buy property in Australia now?

Authored by the expert who managed and guided the team behind the Australia Property Pack

Everything you need to know before buying real estate is included in our Australia Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Australia. If you'd like to learn more about us, you can check our presentation page.

What are current property prices across Australia's major cities and regions?

As of September 2025, Australia's property market shows stark price variations across different cities and regions.

The national median home price sits between $827,000 and $912,563, with houses averaging approximately $915,000 and units around $678,000. Capital city medians range from $1,044,867 to $1,082,000 for houses, while regional areas maintain more affordable medians at $703,894.

Sydney leads with the highest entry costs, requiring $1.08-$1.83 million for houses and $700,000-$1.1 million for units. Melbourne follows closely with houses around $1.1 million and units starting at $700,000. Brisbane offers more accessible pricing with houses at $900,000-$1 million and units from $600,000.

Adelaide presents strong value with houses from $750,000 and units from $500,000, while Perth remains the most affordable capital with houses from $700,000 and units from $450,000. Regional Australia maintains the most accessible entry points with houses from $700,000 and units from $500,000.

These price levels reflect the market's record highs, driven by sustained demand and limited supply across most major markets.

How have property prices moved over the past 12 months and compared to the last 3-5 years?

Australia's property market has delivered substantial growth over both short and long-term periods, though with significant regional variation.

Over the past 12 months, national home values increased by 4.9%, but this masks considerable city-by-city differences. Adelaide leads recent growth at 9.4%, followed by Brisbane at 9% and Perth at 7.9%. Sydney shows minimal growth at just 0.1% monthly with modest year-on-year gains, while Melbourne has largely flattened with slight growth. Canberra actually declined 0.1% monthly with only modest yearly gains.

Regional areas significantly outpaced capital cities, growing 6.5% annually compared to capitals' 4.3%. This represents a reversal from historical patterns where capitals typically led growth.

The five-year perspective reveals dramatic appreciation, with national home values surging 39.1%, adding approximately $230,000 in median value. This represents one of the strongest five-year periods in Australian property history, though still below the historic peaks seen in the 1980s and early 2000s.

This sustained growth cycle reflects the combination of population growth, tight supply conditions, and historically low interest rates during much of this period.

What are the short-term forecasts for property values in different areas over the next 6-12 months?

Short-term forecasts indicate continued but moderating growth across Australia's property markets over the next 6-12 months.

Perth stands out with the strongest forecast growth, potentially exceeding 10% for houses and 8.6% for units, driven by severe undersupply and strong population growth. Brisbane and Adelaide also show robust forecasts reflecting tight market conditions and continued interstate migration.

Melbourne shows the most modest growth expectations at 2.8% for houses, reflecting higher supply levels and affordability constraints. Sydney's moderate 4.9% forecast reflects its mature market status and high price base limiting further rapid appreciation.

It's something we develop in our Australia property pack.

What are the medium-term and long-term outlooks for property growth in Australia?

Australia's medium and long-term property outlook remains positive, though growth rates are expected to moderate from recent highs.

For 2026, national forecasts project house price increases of approximately 6% and unit price rises of 5.5%. Sydney and Melbourne are expected to lead medium-term gains, with Sydney potentially reaching a median of $1.83 million by June 2026, representing 7% growth from current levels.

The medium-term outlook through 2025-2030 is supported by several key fundamentals: expected interest rate cuts that will improve affordability and borrowing capacity, continued population growth through migration programs, persistent housing supply shortages in major markets, and ongoing infrastructure investment driving regional development.

Long-term prospects favor larger capitals due to their employment opportunities, infrastructure, and lifestyle amenities, though regional areas with strong connectivity and infrastructure development will also benefit. Perth, Adelaide, and Brisbane are positioned for above-average growth due to affordability advantages and strong population inflows.

The sustainability of this growth depends on policy responses to housing supply, interest rate trajectories, and migration levels, but underlying demand-supply imbalances suggest continued upward pressure on values.

Don't lose money on your property in Australia

100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Download Now

How do different property types compare in terms of value trends and demand?

Property type performance varies significantly across Australia's markets, with houses maintaining premium valuations but units showing stronger growth potential.

Houses continue to command higher median prices and have historically delivered stronger capital appreciation, particularly in established suburbs with land value premiums. The national median for houses sits around $915,000 compared to $678,000 for units, reflecting the scarcity value of land in major cities.

However, units and townhouses are gaining popularity due to affordability pressures, with forecasts indicating stronger percentage gains for units in coming years. This reflects both affordability constraints pushing buyers toward more accessible options and the higher rental yields often available from unit investments.

In major capitals like Sydney and Melbourne, units provide the primary entry point for first-home buyers and investors, with price points starting around $700,000 compared to houses starting above $1 million. Regional markets offer more balanced pricing between property types.

Townhouses occupy a middle ground, offering more space than units while remaining more affordable than detached houses. They're particularly popular in growth corridors and new developments where they provide good value for families seeking more space.

For investors, units often deliver superior rental yields and require lower maintenance, while houses provide better long-term capital appreciation potential but with higher entry costs and ongoing expenses.

What are current rental yields and vacancy rates across key cities and suburbs?

Australia's rental markets remain exceptionally tight as of September 2025, creating favorable conditions for property investors across most major cities.

Rental vacancy rates are at historically low levels nationally, particularly in affordable cities like Perth, Adelaide, and Brisbane where strong population growth has outpaced rental supply increases. This tightness is driving both rental growth and improved yields for property investors.

Perth leads rental market strength with some of the lowest vacancy rates and highest yield potential, particularly for units in growth suburbs. Adelaide and Brisbane also show strong rental demand with limited available stock, supporting both rental growth and capital appreciation.

Sydney and Melbourne rental markets remain tight despite higher property prices, though yields are compressed by the high purchase prices. However, demand remains strong from both domestic and international renters, particularly in inner-city areas and near employment centers.

Regional areas with strong employment opportunities, particularly in mining and agriculture regions, often deliver higher rental yields than capital cities while maintaining reasonable vacancy rates. University towns and regional centers with government employment also provide stable rental demand.

The combination of low vacancy rates and strong rental growth creates a supportive environment for property investors, though yields vary significantly by location and property type.

How are interest rates and lending conditions affecting affordability and borrowing power?

Interest rates and lending conditions significantly impact Australia's property market accessibility as of September 2025.

Current interest rates remain at elevated levels, which has slowed price growth in some markets and reduced borrowing capacity for many buyers. However, market expectations of future rate cuts are beginning to boost buyer sentiment and improve purchasing prospects for the coming periods.

Affordability challenges are most acute in Sydney and Melbourne, where high median prices combine with current interest rates to limit borrowing capacity. A typical borrower might need household income of $200,000+ to service loans for median-priced houses in these cities, excluding many potential buyers from the market.

Perth, Adelaide, and Brisbane offer more manageable affordability profiles, with median prices allowing entry for households with more modest incomes, particularly for units and entry-level houses. Regional areas generally provide the best affordability outcomes.

Lending conditions have tightened compared to previous years, with banks applying stricter serviceability tests and deposit requirements. However, competition among lenders maintains reasonable access to finance for qualified borrowers with stable employment and adequate deposits.

Expected interest rate cuts in coming periods should improve borrowing capacity and affordability, potentially driving increased buyer activity and supporting continued price growth across most markets.

What government incentives, taxes, or policy changes could impact buying now versus later?

Government policies continue to influence Australia's property market timing considerations through various incentive programs and tax settings.

First-home buyer incentives remain available across states, including stamp duty concessions, grants, and shared equity schemes that can significantly reduce entry costs. These programs particularly benefit buyers in the $600,000-$800,000 price range, making units and entry-level houses more accessible.

The federal government maintains the First Home Super Saver Scheme, allowing buyers to save deposits through superannuation with tax advantages. State-specific programs vary but generally provide meaningful support for qualifying first-home buyers.

Negative gearing and capital gains tax concessions continue to support investment property demand, maintaining competitive pressure in markets where investors are active. There's ongoing political debate about potential changes to these settings, though no major reforms are currently scheduled.

Some states are considering or implementing stamp duty reform, potentially replacing upfront costs with annual land taxes. This could improve affordability for buyers but may be implemented gradually.

Foreign buyer taxes and restrictions remain in place across most states, limiting international competition in residential markets. Migration policy settings continue to support population growth, underpinning long-term housing demand.

Buyers should monitor policy announcements as changes to incentives or taxes could affect optimal timing for property purchases.

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 do population growth, migration, and infrastructure projects shape demand in different regions?

Population dynamics and infrastructure development are key drivers shaping Australia's regional property demand patterns in 2025.

Strong interstate migration continues to Perth, Adelaide, and Brisbane, driven by affordability advantages, employment opportunities, and lifestyle factors. This migration creates sustained housing demand in these markets, supporting both rental and purchase activity.

Perth benefits from resources sector employment and lower living costs attracting families from eastern capitals. Adelaide gains from manufacturing and technology sector growth plus lifestyle migration. Brisbane captures migration from Sydney and Melbourne seeking affordability while maintaining urban amenities.

Infrastructure projects significantly influence regional demand patterns. Major transport projects like rail extensions create new property hotspots in previously less accessible areas. Mining and energy projects drive regional property demand in resource-rich areas.

International migration continues supporting capital city demand, particularly in Sydney and Melbourne where new arrivals typically settle initially. This creates ongoing rental demand and eventual purchase activity as migrants establish themselves.

Regional centers with strong infrastructure connections, such as those with high-speed internet, reliable transport links, and quality healthcare facilities, increasingly attract both residents and investors seeking growth opportunities outside major capitals.

It's something we develop in our Australia property pack.

Which locations are showing signs of oversupply or undersupply right now?

Australia's property markets show clear supply-demand imbalances that create distinct opportunities and risks for buyers.

Undersupplied markets include Perth, Adelaide, and Brisbane, where strong population growth has outpaced new housing construction. These cities show tight rental markets, low available stock for sale, and sustained price growth reflecting supply constraints.

Perth particularly suffers from severe undersupply after years of limited construction following the mining downturn. The combination of renewed population growth and insufficient new supply creates strong upward pressure on both rents and prices.

Adelaide and Brisbane also show undersupply characteristics, with interstate migration driving demand faster than construction can respond. Limited land availability in established areas compounds these supply challenges.

Melbourne and Sydney show mixed signals, with higher listing levels in some segments suggesting early oversupply concerns. Melbourne's apartment market in particular shows signs of increased supply in some corridors, though established areas remain tight.

Regional markets vary significantly, with some mining and agricultural centers showing undersupply while others affected by economic changes may have excess stock. Coastal retirement areas often show seasonal supply variations.

Buyers should focus on undersupplied markets for both investment and residential purposes, as these offer the best prospects for continued capital appreciation and rental returns.

At what budget level can you enter different property markets and what does that get you?

Property entry budgets vary dramatically across Australia's markets, with significant differences in what buyers can access at each price point.

In Perth, $450,000-$600,000 provides access to well-located units and some entry-level houses in growth suburbs. Adelaide offers similar value, with $500,000-$700,000 accessing good unit options and entry houses.

Brisbane requires $600,000+ for quality units and $800,000+ for entry-level houses in desirable suburbs. Melbourne demands $700,000+ for accessible units and $1 million+ for houses in established areas.

Sydney presents the highest barriers, with $700,000+ required for outer suburban units and $1.08 million+ for entry-level houses. Quality properties in established areas typically require $1.5 million+.

Regional areas offer the best value, with $500,000-$700,000 often accessing quality houses in established towns with good amenities and growth prospects.

What's the best positioning for living, renting out, or reselling to balance risk and opportunity today?

Optimal property positioning in Australia's current market depends on specific goals but generally favors undersupplied growth markets and strategic property types.

For owner-occupiers seeking to live in the property, consider outer suburbs of major capitals or regional cities with strong infrastructure connections. These areas offer better affordability while maintaining access to employment and amenities. Growth corridors with planned transport improvements provide excellent long-term prospects.

Investment buyers seeking rental income should target undersupplied, high-growth cities like Perth, Adelaide, and Brisbane. Units often provide better rental yields and lower entry costs while still capturing capital appreciation. Focus on locations with strong employment fundamentals and population growth.

Buyers planning to resell should focus on areas with infrastructure upgrades, strong migration patterns, and tight supply conditions. Avoid overheated luxury markets where prices may be vulnerable to correction. Entry-level properties in growth areas typically offer more stable appreciation prospects.

For balanced risk and opportunity, entry-level units or townhouses in growth regions or affordable suburbs of major cities provide the optimal combination. These properties offer reasonable entry costs, good rental potential, and solid appreciation prospects without excessive risk exposure.

Perth, Adelaide, and Brisbane currently offer the best balance across all three strategies, with strong fundamentals supporting both rental returns and capital growth while maintaining reasonable entry costs compared to Sydney and Melbourne.

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.

Sources

1. PropTrack Home Price Index July 2025
2. CoreLogic National Home Values Research 2025
3. YourMortgage Median House Prices Australia
4. Elders Real Estate Market Trends 2025
5. KPMG House Price Forecasts
6. Real Estate Australia Five Year Price Analysis
7. Smart Mortgage Broking Market Outlook 2025-2026
8. Whitestar Australian Property Forecast 2025