June 2025
Home prices continued to rise around Australia in May, with all of the capital cities seeing gains.
Australia continues to fall short of housing development targets, which is set to provide a further boost to dwelling values over the medium and long-term.
Home values maintain growth momentum
Home values in Australia posted a 0.5% rise in May, bringing growth in Cotality’s National Index to 1.7% for the first five months of 2025.
Tim Lawless, Cotality research director, said that the Reserve Bank of Australia’s (RBA) rate cut helped to sustain the momentum in dwelling price gains around almost all of Australia.
All of the nation’s capital cities saw increases in home values of at least 0.4% last month.
Lawless said expectations of further rate cuts from the RBA will help to buoy Australian home prices until the end of 2025.
“With interest rates falling again in May, we are likely to see a further positive influence flowing through to housing values in June and through the rest of the year.”
Trump’s tariffs create cost uncertainty
While inflation in Australia has eased to within the RBA’s target range, its future course remains uncertain as a result of the turmoil caused by the Trump administration’s so-called ‘Liberation Day’ tariffs.
The tariffs could have an ambivalent impact on construction costs in Australia. While they could push costs higher by disrupting supply chains, they could also increase supply by impeding China’s exports to the huge US market, forcing manufacturers to search for alternatives.
AltusGroup reports that material prices already offer a mixed outlook. Steel and copper prices have trended lower, although energy-intensive materials such as brick and concrete remain expensive.
In the first quarter of 2025, prices for building materials used in residential construction recorded the first quarterly price decrease since the March 2012 quarter, driven by tepid demand in the eastern state of NSW and Victoria.
AltusGroup’s report also highlights Australia’s scarce supply of skilled construction labour as another important cost factor, given the upward pressure it’s putting on wages.
Dip in housing approvals led by NSW and Victoria
Australia appears to be lagging further behind national cabinet’s ambitious goals for the creation of 1.2 million well-located homes by the middle of 2029.
ABS data points to a drop in approvals across Australia of -5.7%. Declines were led by the two most populous states of NSW (-7.8%) and Victoria (-6.5%).
This leaves approvals well beneath the housing accord targets despite an overall upward trend.
Tom Forrest, CEO of Urban Taskforce Australia, said the data should come as a wake up call for the recently re-elected Albanese government.
“While there is clear improvement with 182,000 new homes approved in the last 12 months, that remains a long way behind the completion of 240,000 homes in every 12 month period of the Housing According,” Forrest said in an official statement.
“There is much more to be done on housing supply before the housing crisis is eased.”
Interest rates trending down could stimulate development activity
CrowdProperty head of operations Lisa Digby said the trend of declining interest rates is expected to stimulate increased activity in the housing market.
“With borrowing becoming more affordable, we anticipate a rise in lending approvals, whether from first-time buyers, investors, or those looking to upgrade,” Digby said.
“This uptick in demand bodes well for developers, particularly when that translates to increased market transactions.”
A lower interest rate environment will also likely see project feasibilities improve. While many developers have been cautious — sitting on the sidelines due to economic uncertainties and the elevated costs associated — there’s still a clear shift towards smaller-scale developments.
“We’re seeing small to medium projects in detached and attached housing and land subdivisions gaining momentum,” Digby said.
“Our increase in recent application volumes supports this trend, showcasing a diverse mix of projects across capital cities and regional centres.”
With the post-election period now behind us, property players are moving forward — acquiring sites, securing finance, and pushing ahead with construction. Overall, the landscape is turning more positive, signaling renewed confidence.
Inadequate supply good news for developers
John Lindeman, CEO, Property Power Partners, points out that even if the National Housing Accord’s target were met, it would still be insufficient to satisfy Australia’s mounting demand for housing.
Australia falling short of the target means the supply-demand imbalance on the housing market will be even more out-of-whack in future.
“The actual rate of completions is falling, and PropTrack forecasts that this trend will continue,” Lindeman said.
“Based on these trends, we will only be meeting around half of the demand for housing expected from population growth over the next five years.”
While this is bad news for home affordability, it’s likely to be a boon for developers who can reap higher home prices — especially amidst a cycle of interest rate cuts.
“As interest rates continue to fall, buyer demand from both investors and owner-occupiers is certain to dramatically increase, especially in the inner suburban areas of our major cities,” Lindeman said.
“This is good news for developers, as more buyers compete for fewer properties, pushing up prices.”
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
May 2025
Australian home values continued to edge higher in April, despite the uncertainty created by Trump’s Liberation Day tariffs and the lead up to the federal election.
The Albanese government’s win could trigger a boom in the housing market, given its increased mandate from Australians to solve the home affordability crisis.
Australian housing prices rise for third month straight
Cotality’s [formerly CoreLogic] national Home Value Index posted a 0.3 percent rise in April, hitting a record high following its third consecutive month of increase. The rise nonetheless marked a modest easing compared to the 0.4 percent rise posted in March.
All of Australia’s capital cities saw increases, led by Darwin with a 1.1 percent rise. Sydney and Melbourne both lagged the nationwide increase, with both seeing a 0.2 rise in their home values.
Tim Lawless, Cotality’s research director, said that the RBA’s February rate cut provided further support to home prices, but this was undermined by the uncertainty surrounding Trump’s surprise tariffs and the federal election.
Albanese’s election win strengthens housing crisis mandate
The Labor party managed to increase its seat majority with its federal election win at the start of May, expanding Anthony Albanese’s clout as national leader.
If Albanese capitalises upon this show of confidence from the Australian public to make good on his election promises, it could prove a boon for the development sector.
Albanese campaigned on solving the home affordability crisis, with a special focus on solving the pain point of younger Australians seeking to enter the housing market.
Labour’s promises include a $10 billion plan for the development of 100,000 new homes dedicated to first home buyers.
The scheme will see government identify commonwealth-owned land that’s available for development, as well as spur states and territories to fast-track approvals.
Since it first assumed government in 2022, Labor has committed to over $43 billion in spending on housing policy.
CrowdProperty CEO David Ingram said the federal election result provides clear political momentum for housing policy.
“We’re seeing that translate into renewed developer confidence,” Ingram said.
“April was a record-breaking month for CrowdProperty, with over $273 million in loan applications — a strong indicator that SME developers are preparing to deliver more housing if the conditions are right. Confidence is rising, but it must be matched by consistent policy execution and support for the developers actually building the homes.
“Funding is the oxygen of housing delivery and SME developers’ biggest challenge to building more homes — it’s often the piece overlooked when policy is discussed,” he said.
“Traditional lenders are still risk-averse, especially with smaller-scale projects. That’s why non-bank finance is playing a critical role in unlocking stalled supply pipelines. At CrowdProperty, our platform is designed to get capital into the hands of capable developers quickly and efficiently — aligning finance with national housing goals.”
Leanne Pilkington, president of the Real Estate Institute of Australia, said Labor’s resounding success in the federal election gives Albanese a firm mandate to follow through on its campaign promises.
“Labor’s return to office comes with a strong mandate to tackle affordability and increase home ownership across the country,” Ms Pilkington said.
“We welcome Labor’s emphasis on supply and affordability. Support for first-home buyers is a vital step toward bridging the generational divide in housing access.”
Labor’s property policies could mean a housing boom
Rob Flux, developer and educator at the Property Developer Network, said that the combined impact of Labor’s housing policies could trigger a boom in the market.
Flux highlights the five percent deposit requirement for first-home owners — a figure which will be even lower when combined with state initiatives — as well as the help-to-buy initiative, which will see the government help buyers by acting as a joint-owner in their homes.
A raft of build-to-rent initiatives will also incentivise the development of more rentable stock, while the ban on foreign investors buying up second-homes should drive the development of new builds and kick-start the construction sector.
“When we combine all of the elements together, a housing boom over the next three to four years is the most likely outcome,” Flux said.
“The challenge will be whether we have enough builders and trades to take on the workload that sits behind this.”
CrowdProperty property director Brian Cullen said that while talk of a housing boom creates optimism, experienced SME developers know that feasibility remains the critical filter between ambition and reality.
“Construction costs, land pricing, and labour availability are still influential variables — but not insurmountable ones,” Cullen said.
“The key is project discipline — strong due diligence, cost control, and having the right finance partners who understand the nuances of the market.
“At CrowdProperty, we work closely with our developer partners to navigate these factors with clarity and confidence, ensuring that good projects remain viable and deliverable, even in a shifting environment.”
Australia still behind on housing targets
Despite committing to solving the housing crisis, the Albanese government’s first term in office has seen Australian housing development fall well short of its ambitious targets.
Albanese’s landmark housing policy in his first term was the National Housing Accord, which sets the ambitious goal of building 1.2 million new well-located homes over the five year period starting from 1 July 2024.
Urban Taskforce Australia CEO Tom Forrest warns that Australia has fallen far short of this goal in the first year of the Accord.
ABS housing completion and commencement figures indicate that only 168,049 dwellings commenced construction in 2024 — 30 percent short of what the National Housing Accord requires.
This means Australia now already faces the enormous task of compensating for this shortfall, as well as making good on the 240,000 new houses needed each year on average to satisfy the target of 1.2 million new homes by 2030.
David Ingram said that to meet the 1.2 million home target, the industry needs to mobilise every part of the development ecosystem.
“This especially applies to the SME development sector, which is best placed to deliver fast, flexible, infill ‘missing middle’ housing,” he said.
“That means giving them access not only to finance, but to planning pathways, repeatable project models, and a supportive policy environment. At CrowdProperty, we’re seeing record demand from developers ready to build — now’s the time to back them.”
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
April 2025
Australia’s housing market appears to be well on the way to recovery, with dwelling values posting further growth in March.
President Trump’s tariffs are roiling markets around the globe, causing gyrations in the US stock market and painful spikes for long US Treasury yields.
The worst case scenario of a global recession could give a boost to Australian housing values, however, by increasing the sector’s safe-haven appeal and driving the RBA to accelerate rate cuts.
Home values pushed higher in March
The housing market has bounced back from its recent short-lived dip, with property values lifting 0.4 percent in March, according to CoreLogic’s national Home Value Index.
March marks the second month of growth in the Home Value Index, reversing three months of consecutive decline that began at the end of last year.
Gains in Australian housing prices were consistent across the country, with every capital city posting gains with the exception of Hobart, which saw a 0.4 percent decline.
Tim Lawless, research director for CoreLogic, said the recovery in price growth was driven by the Reserve Bank of Australia’s (RBA) February rate cut.
“Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values, along with the cut’s direct influence of a slight improvement in borrowing capacity and mortgage serviceability,” Lawless said.
The RBA’s decision to maintain the official cash rate at 4.10% in April has not dampened market expectations of further easing. ANZ Research anticipates three consecutive 25 basis point cuts in May, July, and August, potentially bringing the cash rate down to 3.35% by August. Similarly, NAB forecasts a more aggressive approach, predicting a 50 basis point cut in May, which would lower the rate to 3.60%.
CrowdProperty CEO David Ingram said that the improving sentiment following the February rate cut is beginning to unlock new opportunities for SME developers.
“We’re seeing early signs of renewed confidence among our developer community,” Ingram said.
“Lower interest rates are lifting borrowing capacity and easing serviceability pressure — factors that improve the feasibility of smaller, well-located residential projects.
“While access to finance remains selective, the right projects in the right locations are now attracting stronger interest and we’ve seen a significant spike in loan enquiries as a result,” he said.
Easing construction costs could boost feasibility
The cost of residential construction has posted a sharp slowdown in growth, which could bode well for smaller developers.
CoreLogic’s Cordell Construction Cost Index (CCCI) lifted just 0.4 percent nationally over the March quarter, representing the smallest rise in 15 years.
The figure marks a major decline compared to the annual rise of 2.9 percent over the 12 months to March 2025.
Lawless said the development could serve to boost the feasibility of projects for smaller developers, especially amidst ongoing gains in Australian housing values.
“While growth in construction costs eased over the quarter, the cost to build a dwelling is still rising from an already high base,” Lawless said.
David Ingram said the moderation in input costs is a welcome development for smaller developers.
“After years of escalating costs and supply chain challenges, this slowdown in construction cost growth is a critical shift,” he said.
“When you combine this with even modest property value gains, the feasibility equation becomes more favourable for SME developers. We expect more projects to become viable in coming months, particularly in locations where planning changes are opening up infill opportunities.”
The impact of Trump’s tariffs on Australian housing
Popular attention is now focused on Trump’s aggressive tariff measures, levied against all of America’s trading partners. The move could spark a trade war and in a worst case scenario lead to a global recession.
Eleanor Creagh, senior economist at REA Group, said to Realestate.com.au that tariffs could have ambivalent impacts on Australia’s property market, with the outcome still uncertain for housing values.
The tariffs could increase the cost of construction materials – which would push housing prices higher for both new builds and renovations.
According to Creagh, if the tariffs undermine global economic growth, this could prompt the RBA to accelerate interest rate cuts, spurring demand for housing.
“It’s fairly unclear what the end outcome will be at this stage, and for the housing market, it’s likely a tug of war with headwinds and tailwinds,” Creagh said.
While economic conditions continue to evolve, Ingram emphasised that the underlying supply challenge remains a dominant force with the potential to shape the market.
“Australia’s housing shortage isn’t going away, it’s getting worse,” Ingram said.
“SME developers have the ability to bring well-located, smaller-scale projects to market faster than large developers. What they need is consistent access to finance and a planning system that supports medium density. Solving the supply crisis means empowering these capable local developers to build more of the homes our communities need.”
Australia’s housing market could boom as others go bust
While Trump’s shock tariffs could have dire implications for the global economy, John Lindeman, CEO of Property Power Partner Ltd., said Australia’s housing market is on track to remain resilient, and perhaps even boom amidst the turmoil.
“Our property market has always boomed during times of international strife, economic uncertainty and global recession because Australia is seen as a safe haven, located far away from all the trouble spots,” Lindeman said.
“If and when economic and social conditions deteriorate overseas, more people will be motivated to move here, not only keeping our economy in growth but also putting more pressure on an already acute housing shortage.”
Lindeman points out that any recessionary conditions that arise as a result of Trump’s trade war could also create tailwinds for our housing market in the form of rate cuts from the Reserve Bank of Australia (RBA).
“Central banks are expected to compensate for higher tariffs by cutting interest rates and Australia is no exception, with our own Treasurer claiming there could be four more rate cuts this year alone,” Lindeman said.
“So not only are we largely insulated from the trade tariff wars, we could expect lower interest rates and more permanent overseas arrivals from less fortunate countries.
“Another property market boom is on its way.”
Additional opportunities are emerging for developers as state governments move to fast-track housing supply through planning reforms. In April, the NSW government introduced new measures allowing buildings of six to eight storeys within 400 metres of train stations and shopping centres, and up to three storeys between 400 and 800 metres from these locations.
NSW is also permitting the development of dual occupancies and has made adjustments to floor space ratios that pave the way for large-scale projects spread across multiple sites.
For these reasons, SME developers should prepare themselves now for further opportunities in the Australian property market in the near-term. Irrespective of how a Trump-led trade war plays out, the significant need to build more homes in Australia remains.
Even amid global uncertainty, Australia’s housing market remains underpinned by strong fundamentals. Lower interest rates, easing construction costs, and urgent supply-side demand are creating a more favourable environment for development.
CrowdProperty provides fast, simple and transparent property project finance for property professionals, learn more.
Opinions or views expressed represent the thoughts of individuals and not those of CrowdProperty or Cache.
