Despite a slowing in the pace of price growth in some markets toward the end of 2024, prices are tipped to continue rising in 2025.

Domain Group predicts that national house prices will increase between 4% and 6% in 2025, with units to increase between 3% and 5%. It also forecasts a long-awaited interest rate drop will help pick up activity in the market in the second half of the year.

Domain Group Chief Economist Dr Nicola Powell says in 2024, the housing market demonstrated remarkable adaptability and strength, with Perth, Adelaide and Brisbane as the standout performers.

However, she says that with more listings on the market and some buyers holding back with affordability concerns, the pace of growth will continue to slow in the early months of 2025 and will only change when the RBA finally cuts its interest rate. “An interest rate cut or targeted stimulus measures could trigger a wave of demand and spark price growth as the housing market responds to this newfound momentum. It may take one or two rate cuts to motivate buyers into action, and the timing of these cuts will shape market dynamics in 2025, perhaps creating a year of two halves, with a weaker first half and a stronger second.”

Domain predicts that the unit market, in particular, will gather further strength in 2025.