Midway into 2025, how are the eastern states' property markets looking?

Among four major city property markets, it is Brisbane’s that has emerged in the first half of 2025 as the one that has seen the largest decline in the availability of affordable suburbs.

The strength of Brisbane’s property market has delivered strong gains for home owners and investors over the past few years but has in the past six months come at the cost of a shocking decline in affordability.

This was especially evident in the unit market.

A new report series by PRD examining the Sydney, Melbourne, Hobart and Brisbane property markets has revealed that the latter had recorded the biggest decline in the percentage of affordable suburbs of those capital cities for almost all stock types.

The largest decline is in Brisbane units. In the report covering the back half of 2024, the proportion of affordable unit suburbs was 60.3 per cent. This proportion has dramatically declined to just 38.7 per cent.

PRD Chief Economist, Dr Diaswati Mardiasmo, said they defined an affordable suburb as one with a median house price or a median unit price significantly lower than the capital city, good liveability, investment return, and stock supply.

“Choosing an affordable and liveable suburb in Brisbane continues to be the most difficult, due to property price growth in most of Brisbane’s suburbs and a low level of new residential stock planned. 

“Sydney and Melbourne proved easier, as many suburbs are still experiencing negative or low-price growth, yet with a higher level of new residential stock in the pipeline.”

Brisbane is now the second most expensive city for houses, especially for those that are also looking for liveability and the possibility of new housing stock.

“The prospect of this price growth slowing down is unlikely, due in part to the concentrated nature of new stock, that is, they are mostly found in suburbs that have a median house price closer to or higher than the Brisbane Metro median house price,” Dr Mardiasmo said.

Hobart still has the most affordable chosen suburbs for houses, followed by Melbourne.

Where are these capitals are heading?

Units continue to provide more hope for Sydney, Brisbane, and Melbourne first home buyers, according to PRD.

There is a stark contrast between the percentage of affordable suburbs in Sydney for houses, at 7.8 per cent, and units, at 36.9 per cent. The only exception to this rule is Hobart, where buyers have almost equal access to affordable suburbs for houses (42.9 per cent) and units (41.0 per cent).

The supply gap between what is being delivered compared to the demand is shaping the prospects of the four capitals.

The report identified the key projects in each city’s pipeline and its consequences for the property market.

Sydney is set to see $33.0 billion worth of new projects in 2025. Most are mixed-use developments, bringing 21,429 new units to market but only 599 stand-alone houses.

“This imbalance signals a continued shift toward higher density living,” Dr Mardiasmo said.

“For buyers, especially those seeking detached homes, this limited pipeline presents an opportunity to secure property before further price pressures build.

“Meanwhile, first home buyers may find more accessible options in townhouses (555) and residential land lots (1,034), which still offer entry-level affordability.”

The significant decline in sales in Brisbane points to a persistent undersupply of available homes, driven by reduced turnover and affordability pressures. Put simply, there aren’t enough homes to meet demand, especially for buyers seeking a foothold in Brisbane’s increasingly competitive market.

“Brisbane Metro is preparing for a construction surge.

“Approximately $21.3 billion worth of projects are scheduled to begin in 2025, with a strong focus on infrastructure and mixed-use developments but not all supply is created equal.

“The city’s next wave of housing will lean heavily toward higher density living, with plans for 10,108 new units, 2,262 townhouses, 13,194 residential land lots.

“By contrast, just 186 new stand-alone houses are in the pipeline, highlighting a trend that could extend the current shortage of detached homes and continue to drive prices up in this segment.”

In Melbourne, Dr Mardiasmo said that right now, conditions favour buyers: price dips, less competition, and more supply coming, but countered that with signs of resilience returning and development activity picking up, the window may not stay open for long.

In 2025, Melbourne is set to see $68.0 billion in new developments, including 5,587 units, 3,419 townhouses, 2,533 stand-alone houses,

“While this will help ease supply pressure over time, demand, especially for detached homes, continues to outpace available stock.”

He said that in Hobart, falling unit prices and reduced competition offer new opportunities for first-home buyers.

“While house supply is still limited, affordability has improved in the unit segment, helping more buyers take their first step into the market.”

Property finishes financial year on a high

Australia’s property market has closed out the 2024–25 financial year on a high, with momentum building across key regions and signs pointing to a confident rebound in the year ahead, according to the Real Estate Buyers Agents Association of Australia (REBAA).

REBAA President Melinda Jennison said from million-dollar median prices in Brisbane to unit surges in Tasmania and renewed confidence in Melbourne, REBAA’s nationwide review reveals a dynamic market fuelled by migration, infrastructure projects, and resilient buyer demand.

“NSW’s property market ends the financial year with solid gains and signs of fresh momentum, as buyer activity picks up and regional hotspots surge ahead,” Ms Jennison said.

“Easing rental pressures, resilient first-home demand, and key infrastructure investments are setting the stage for a stronger, more balanced 2025–26.”

The Melbourne property market closed out the financial year on a promising note, with renewed buyer confidence and strong rental demand signalling a fresh wave of opportunity, she said.

“With stabilising rates, increased migration, and more stock hitting the market, the city is shaping up as a prime spot for savvy investors and first-time buyers alike,” she said.

“Brisbane’s housing market has hit record highs, as strong migration and investor confidence pushed prices past the million-dollar median mark.

“With tight rental conditions, rising interstate interest, and Olympic-fuelled infrastructure on the horizon, the city’s growth streak shows no signs of slowing.”

Ms Jennison said Tasmania’s housing market is gaining serious traction in 2025, with buyer demand and competition pushing sales volumes and prices higher across much of the state.

“From surging interest in units to packed open homes and tightening supply, momentum is clearly building as we head into the second half of the year,” she said.

“Tasmania’s property market is making a strong comeback, with rising sales and solid price gains driven by buyer confidence and fierce competition across key regions.”