Seasoned buyers know the market tends to move quickly once inflation stabilises and borrowing becomes cheaper – and history backs them up. Bank of Queensland chief economist Peter Munckton analysed 40 years of data and found a 10–15% price rise over the next two years is a reasonable bet, regardless of how many rate cuts the central bank ultimately delivers.
Unsurprisingly, recent Australian Bureau of Statistics lending figures show new loans to investors rose 8.8% over the year ending March 2025. Momentum looks set to continue too, with the Australian Property Investors’ Q1 property sentiment survey revealing that 57% of investors plan to buy an investment property in the next 12 months.
It’s not just investors, either. Westpac’s latest Housing Pulse survey shows owner-occupier interest is climbing too, with the share of people planning to buy in the next year rising to about a third, up from a quarter in 2024.
Westpac senior economist Matthew Hassan said, “The responses show both a high degree of ‘pent-up’ demand – likely reflecting earlier plans that have been delayed – and an expectation that 2025 will provide a good opportunity to move on these.”
In short, buyer demand is building. So if you're planning to invest, now could be the time to act.
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Property prices grew 67% in 10 years – what can we expect next?
Nationally, home values grew an impressive 67% in the last ten years, according to Cotality’s (formerly CoreLogic) April home value index. But what’s behind this rapid growth – and can it continue?
Here are some of the key drivers:
1. Low interest rates. Before the rate hikes began in May 2022, the cash rate sat at just 0.10%. Cheap borrowing costs made mortgages more accessible, fuelling buyer demand and pushing up prices.
2. Population growth. Rising immigration and natural population increases added pressure to housing demand – particularly in the capital cities where most new arrivals tend to settle.
3. Limited housing supply. While demand surged, supply lagged behind. A slowdown in building approvals and rising construction costs contributed to a growing housing shortfall.
4. Wage growth and low unemployment. Low unemployment and steady wage growth gave many buyers the confidence – and borrowing power – to enter the market.
Of course, such rapid growth has come at a cost. Affordability has taken a hit, with property prices outpacing incomes and mortgage repayments consuming a larger share of household budgets. First home buyers, in particular, are feeling the squeeze.
So what’s next?
Most analysts expect home values to keep rising, but at a slower pace. Affordability constraints will play a bigger role, although further interest rate cuts and government support – such as low-deposit loans and housing supply initiatives – could help keep the market moving.
If you’re in the market to buy a home and want an idea of the size of home loan you qualify for, our mortgage calculator can help you determine your borrowing capacity. Click here to complete a short 60-second form.