Australian Property Market 2025: Are Prices Going Flat?

The Australian property market has long been a topic of heated debate—will prices keep climbing, are we headed for a crash, or is the market finally set to go flat? In 2025, the answer appears to be ‘flat’, with most capital cities experiencing a significant slowdown in price growth. But what does a flat market actually mean for everyday Australians, and how should you respond?

Why Is the Property Market Flattening in 2025?

After several years of rapid growth, the Australian property market is now facing a period of stagnation. According to CoreLogic’s latest housing report, price growth in Sydney, Melbourne, and Brisbane has slowed to under 1% per quarter, with regional areas seeing similar trends. Several factors are contributing to this flattening:

• Interest Rates Hold Steady: The Reserve Bank of Australia (RBA) kept the cash rate at 4.35% through early 2025, maintaining higher borrowing costs and reducing buyer enthusiasm.

• Cost of Living Pressures: Inflation remains elevated, keeping household budgets tight and limiting the ability to save for a deposit or upgrade homes.

• Increase in New Listings: More Australians are choosing to sell, increasing supply and reducing upward pressure on prices.

• Policy Shifts: The 2025 Federal Budget introduced new incentives for first-home buyers but also tightened lending for investors, balancing out demand.

What Does a Flat Market Mean for Buyers and Sellers?

A flat property market doesn’t mean there’s no movement—just that median prices are holding steady instead of rising or falling dramatically. Here’s how different groups are affected:

• Home Buyers: For first-home buyers, a flat market can be a blessing. Less competition means more negotiation power and less risk of being priced out. Plus, government schemes like the First Home Buyer Guarantee are still active in 2025, helping with lower deposits.

• Investors: Rental yields are stable, but the days of double-digit capital gains are on pause. Investors may focus more on cashflow-positive properties or look to value-add renovations to boost returns.

• Sellers: With more stock and fewer buyers, homes are taking longer to sell. Vendors need to be realistic on price and may need to invest in staging or minor upgrades to stand out.

How to Make the Most of a Flat Market

While a flat market can feel uninspiring, it actually presents unique opportunities for strategic buyers and sellers. Here’s how to navigate 2025’s conditions:

• Do Your Homework: Micro-markets still matter. Suburbs with new infrastructure, proximity to schools, or tight rental supply may still outperform.

• Negotiate Hard: With less competition, buyers can push for discounts, longer settlement periods, or inclusions like whitegoods.

• Consider Upgrading: If you’re selling and buying in the same market, the relative price difference matters more than headline prices. Flat conditions can make upgrading more affordable.

• Think Long-Term: Property is a long game. If your finances are secure, a flat market can be a good time to buy quality assets without the fear of missing out.

Looking Ahead: Will the Market Stay Flat?

Most major banks, including NAB and Westpac, are forecasting continued stability for the remainder of 2025, with only modest growth in 2026 as rates are tipped to fall. However, unexpected economic shocks—like a surge in migration or rapid changes in interest rates—could quickly change the landscape.

For now, a flat market offers breathing space for buyers and a reality check for sellers. Staying informed and flexible is key to making smart property decisions in 2025.