Property prices are tipped to keep growing, particularly in Australia’s smaller capital cities in 2025.

SQM Research’s 2025 Boom and Bust Report says the most likely scenario next year of a 25 to 50 basis point rate cut midway through the year means property values could increase between 1% and 4%. SQM Research managing director Louis Christopher says Perth will lead the market with growth between 14% and 19%, followed by Brisbane (9% to 14%) and Adelaide (8% to 13%).

Christopher predicts that prices will drop by as much as 5% in both Sydney and Melbourne. “Our two largest capital cities, along with Canberra and Hobart, will start 2025 off in the red,” Christopher says. “We are currently recording dwelling price falls in each of these cities. “However, once interest rate cuts do occur, we are expecting a speedy bounce in demand for Sydney and Melbourne in particular (where both are still) experiencing underlying housing shortage relative to the strong population growth rates.”