Property prices are expected to continue rising in 2025, particularly in Australia’s smaller capital cities, according to SQM Research’s 2025 Boom and Bust Report.

The report predicts that a likely 25 to 50 basis point interest rate cut midway through the year could boost property values by 1% to 4% nationally.

SQM Research Managing Director Louis Christopher forecasts Perth to lead the market, with price growth between 14% and 19%, followed by Brisbane (9% to 14%) and Adelaide (8% to 13%).

In contrast, Sydney and Melbourne are expected to see price declines of up to 5%.

Christopher says, “Our two largest capital cities, along with Canberra and Hobart, will start 2025 in the red. We are currently recording dwelling price falls in these cities.”

However, he anticipates a quick rebound once interest rate cuts 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,” Christopher adds.