If you’re trying to make sense of where the Australian property market in 2025 is heading—and how interest rate changes might affect you—you’re not alone.

At RateTracker, we’ve sat down with leading economist Stephen Koukoulas to cut through the noise. Here’s what you need to know about housing prices, the RBA’s interest rate outlook, and how to make sure you’re always on the best mortgage rate in Australia.

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1. Australian Property Market 2025: Prices Defy the Odds

Despite more than 4% in RBA rate hikes since 2022, property prices in cities like Adelaide, Brisbane, and Perth have surged by up to 70% in recent years.

Why prices are still rising:

• Strong population growth from migration
• Chronic housing shortage due to high construction costs and trade shortages
• Investor demand chasing high rental yields in tight rental markets

Melbourne’s surprise position:
Over the last decade, Melbourne’s house prices have grown just 1.8% annually, compared to Perth’s 14% and Adelaide’s 12%. This makes Melbourne relatively affordable and potentially poised for a property growth catch-up between now and 2028.

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2. Melbourne Property Growth Forecast

Why Melbourne could outperform in the coming years:

• High population growth—second only to Brisbane
• Better affordability compared to other capitals
• Attractive rental yields for investors
• Potential shift in buyer sentiment following recent elections

If you’ve been priced out of other cities, Melbourne’s relative value could present an opportunity—especially before interest rates begin to fall.

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3. RBA Interest Rate Predictions Australia 2025–2026

The RBA’s decision to hold the cash rate at 3.85% recently shocked economists, especially with inflation easing and economic growth remaining soft.

Stephen Koukoulas’ view:

• Inflation heading towards the 2–3% target range
• Unemployment stable at 4.1% but edging higher
• Market pricing in 0.75–1.00% in interest rate cuts within 9–12 months

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Why this matters for mortgage holders

Rate cuts will lower repayments—but banks don’t always pass them on in full. Monitoring your rate now can ensure you benefit as soon as the market shifts.

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4. Economic Outlook for Australian Homeowners and Investors

Key takeaways for property owners in 2025:

• Opportunities in undervalued markets: Melbourne and Hobart are more affordable compared to Perth, Brisbane, and Adelaide.
• Low rental vacancy rates are keeping yields high—attracting investors.
• Sentiment is improving: Wages are rising slightly faster than inflation, and rate cuts could further boost confidence.

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5. How to Always Get the Best Mortgage Rate in Australia

Even in a falling interest rate environment, many Australians stay stuck on uncompetitive loans.

That’s why RateTracker automatically:

• Monitors your interest rate daily
• Alerts you when your rate becomes uncompetitive
• Helps you renegotiate or refinance to a better deal

💡 Bottom line: Whether the Australian property market in 2025 continues to climb or cools, being proactive about your mortgage rate can save you thousands.

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