The Australian Property Report | July - December 2025 In sight.
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The Australian Property Report July - December 2025 1 A message from Nick Boyd 2 Local market update 4 Our network 8 Metropolitan overviews 9 Regional state overviews 13 Global property report 2025 16 Rental market update 20 Commercial property report 22 Short term rental market report 24 Contents. 34 Harriette Street, Neutral Bay, NSW
2 A message from Nick Boyd. The first half of 2025 has unfolded as an interesting period for Australian real estate, shaped by a multitude of domestic and global forces. Despite an environment marked by uncertainty, from the federal election to international trade tensions, the Australian property market continues to demonstrate remarkable resilience and adaptability. Navigating political and economic headwinds Housing policy took centre stage in the 2025 federal election, with the Albanese government securing a landslide victory on the back of a housing-focused agenda. Their commitment to increasing supply and improving affordability and access to homeownership, especially for first-home buyers, has begun to influence market sentiment. Whether these initiatives translate into tangible improvements to housing accessibility remains to be seen. It is one thing to promise and another to deliver. In April, U.S. President Donald Trump’s announcement of new tariffs briefly sent shockwaves through global markets. While many of the tariffs were quickly paused, the episode highlighted the fragility of the global economy and Australia’s exposure to such volatility. It served as a reminder of the need to stay cautious, flexible and forward-looking. Market performance and regional trends Australia’s property markets have responded differently to ongoing economic pressures. Sydney and Melbourne, still feeling the aftershocks of 2024’s rate hikes, supply issues and rapid population growth, are showing early signs of recovery, driven by pent-up demand and returning buyer confidence. CEO OF BELLE PROPERTY, HOCKINGSTUART AND ACTON | BELLE PROPERTY
The Australian Property Report July - December 2025 3 Meanwhile, Brisbane, Perth, and Adelaide markets continue their upward trajectory albeit at a more moderate pace, underpinned by affordability, lifestyle appeal, and interstate migration. Across our national network, we transacted nearly $9 billion in property in the first six months of 2025, a testament to the enduring demand and depth of market activity across all segments. Ongoing uncertainty around land tax and shifting policies in Victoria is creating challenges for landlords. With rental supply tightening as investors reassess their positions, rents are rising, exacerbating affordability concerns. Balanced reform that acknowledges the role of private investors will be critical to avoiding a deeper housing crisis. Interest rates and buyer sentiment Interest rate movements remain one of the most significant influencers of property market behaviour. The RBA’s past rate hikes placed pressure on stretched borrowers, but recent cuts have offered relief and the possibility of further reductions in the second half of 2025 has lifted buyer sentiment, encouraging many back into the market. Notably, we continue to see strong price growth in pockets where demand consistently outweighs supply. Investor activity, which had previously slowed due to uncertainty and cost of borrowing, is beginning to rebound, particularly in areas such as Brisbane, Sunshine Coast and Adelaide, offering strong rental yields and long-term capital growth prospects. Source: CoreLogic Generational wealth and market dynamics Real estate continues to be a cornerstone of Australian wealth. Baby boomers, who currently hold around half of the country’s private wealth, are playing a pivotal role in today’s market dynamics. As many look to downsize or relocate, they are not only releasing capital into the market but also supporting the next generation, often their children, in achieving homeownership. This intergenerational wealth transfer is accelerating movement, especially in suburban and lifestyle regions, boosting both liquidity and confidence in the market’s long-term outlook. Looking ahead The outlook for the second half of 2025 is cautiously optimistic. Government affordability measures, interest rate relief, and population growth suggest further opportunities for buyers and investors. However, ongoing global uncertainties, particularly in trade and monetary policy, call for continued vigilance. At Belle Property, Acton | Belle Property, and Hockingstuart, we remain committed to supporting clients through every phase of the property journey. Whether you are new to the market, expanding your investment portfolio, or navigating a shifting landscape, we are here to help you make confident, informed real estate decisions in every market condition.
Local market update | Busselton, South West WA. The Acton | Belle Property South West team have been consistently recognised as Number 1 in WA for Multi-Office Top Sales at the Belle Property State Awards. Busselton Jetty, Busselton, WA Acton Belle Property South West covers a large area of the South West region with offices in Bunbury, Busselton, Dunsborough and Margaret River. Team Mat Moulton has over 15 years of experience in selling residential and rural properties in these areas, with high end marketing ideas to ensure your property is seen by the widest buyer pool possible. Mat is heavily involved in the community with helping run and coordinate the finish line each year for the Busselton Ironman event plus being on the local organising committee, and proudly sponsoring the Busselton City Football Club's junior team. Mat's in-depth understanding of the local property scene comes from these local connections, love of the region and solid appreciation of real estate and the fast growing local market. "Overall the market has certainly seen an increase, with lots of people from Perth and over east looking to invest in this special part of the South West." Mat Moulton | Sales Executive Acton Belle Property South West 4
STAND OUT SALES Mat Moulton | 0438 523 456 mat.moulton@belleproperty.com 9 $1,375,000 7 Bangalo Close, Vasse Days on market: Sold price: 4 a 2 b Mat Moulton | 0438 523 456 mat.moulton@belleproperty.com 35 $1,010,000 45 Reynolds Street, West Busselton Days on market: Sold price: 3 a 1 b 2 c Mat Moulton | 0438 523 456 mat.moulton@belleproperty.com 7 $780,300 17 Canning Street, Yalyalup Days on market: Sold price: 3 a 2 b 2 c Mat Moulton 0438 523 456 mat.moulton@belleproperty.com 8 $1,150,000 1 Redwood Close, West Busselton Days on market: Sold price: 4 a 2 b 2 c The Australian Property Report July - December 2025 5 2.21 ha 974 sqm 2113 sqm 432 sqm
Busselton & surrounding suburbs | Aug 2024 - Aug 2025. Port Geographe Marina, Geographe, WA 475 Number of properties sold $3.65m $415k 20.2% 15 19 6.1% $933k $760pw Highest sale price Most affordable sale price Sales growth Average days on market (sales) Median sale price Average days on market (rentals) Rental growth Median rental price H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H 6
Busselton local forecast. The South West property market remains highly competitive in the second half of 2025, with high demand from buyers and little stock available to select from. Return flights from Busselton to Sydney and Melbourne has seen an influx of travellers coming to see family, friends or as first time visitors. The Bunbury Outer Ring Road (Wilman Wadandi Highway) has also made for faster travel between Perth and Busselton for a weekend down south or to attend our regional events. The South West offers a fantastic lifestyle with a range of activities like mountain biking, coastal walks, stunning bays to swim with an array of vineyards, breweries and local events to enjoy. Busselton has some great cafes, restaurants and local shops to take in or pop down to the foreshore for a coffee or craft beer. Busselton Beachfront & Jetty Precinct, Busselton, by Sitchu. The Australian Property Report July - December 2025 7
8 NSW QLD W NT TAS A SA 12 21 46 2 1 ACT VIC ustralia. 2 37 4 75 Our network. Belle Property, Hockingstuart and Acton | Belle Property are trusted names nationwide, with over 200 offices in prime lifestyle locations across NSW, VIC, QLD, SA, WA and the ACT. Our full-service agencies deliver the same care and attention to every property, from studios to multi-million-dollar homes. EXPERIENCE THE DIFFERENCE ACROSS AUSTRALIA. Our national network gives us access to over 3 million buyers, bespoke marketing resources and exclusive supplier partnerships. This maximises interest, drives competition and delivers outstanding results to our clients.
The Australian Property Report July - December 2025 9 Metropolitan overviews. In the first half of 2025, Australia’s residential property market is experiencing a mixed but largely stabilising landscape, with most capital cities showing signs of recovery following the market downturn of 2022–2023. Price growth is returning, supported by population growth, tight supply and strong rental yields. Interest rate cuts and easing inflation have lifted buyer confidence, especially among owner-occupiers and first-home buyers. While the market remains pricesensitive, momentum is building on expectations of further rate relief. Adelaide’s residential property market remains resilient, with strong growth despite national economic challenges. As of March 2025, the median house price reached $847,000, up from $803,000 in September 2024 - an annual rise of 9.8%. This positions Adelaide among Australia’s top-performing capital cities. High interest rates and inflation have not dampened demand, especially in northern suburbs experiencing significant price increases. Growth is expected to moderate through 2025, supported by the city’s lifestyle appeal, vibrant events scene, and proximity to hills and beaches. Suburbs with quality schools and new developments remain highly sought after, and demand for luxury homes continues, underscoring the diverse and dynamic nature of Adelaide’s housing market. Source: Valuergeneralsa.gov.au ADELAIDE, SA “Rate cuts - and talk of more to come - have lifted buyer confidence. With supply in Adelaide 30% below the five-year average, demand remains strong, especially sub $1million.” – Rhys Digance, Principal Belle Property Glenelg & Henley Beach
10 BRISBANE, QLD As of early 2025, Brisbane’s property market is showing strong growth, driven by high demand, limited supply and major infrastructure projects. The median dwelling price has reached $907,864, up 7.8% year-on-year. Detached houses rose 6.8%, while units surged 12.8%, outperforming those in Sydney and Melbourne. Key drivers include interstate migration, a resilient local economy and momentum from the upcoming 2032 Olympic Games. Tight rental conditions, with a 1% vacancy rate and 3.6% annual rent growth, are adding pressure. To boost housing supply, Brisbane’s Lord Mayor has announced plans to rezone 14% of residential areas for higher density. Suburbs like Paddington, Ashgrove and Salisbury continue to perform well, offering strong potential for capital growth and rental returns. Source: Corelogic, PropTrack CANBERRA, ACT Canberra’s property market is stabilising, with growing confidence following a pre-election pause. Improving economic conditions and strong lifestyle appeal are drawing buyers and sellers back. The median house price has risen 3.6% to $854,000. Auction clearance rates are up to 61% and rental yields have increased to 4.1% - signs of a balanced, steady market. Demand remains strong in well-serviced suburbs like Belconnen and Gungahlin. With positive sentiment and solid fundamentals, Canberra’s market is well-positioned for sustained activity throughout 2025. “With the election settled and further rate cuts expected, we anticipate a stronger market in late 2025.” Source: Corelogic – Dan McAlpine - Principal, Belle Property Canberra
The Australian Property Report July - December 2025 11 LAUNCESTON, TAS Tasmania’s property market is evolving, with Launceston emerging as a hotspot for buyers and investors. Median house prices have risen 7.5% to $790,000 and units have jumped 20.88% to $550,000, driven by affordability and upgrades like Legana’s new primary school. Population growth (1.4% in 2024) is intensifying demand and worsening the housing shortage. While Hobart values dip, Launceston continues to climb. Policies like “Stamping Out Stamp Duty” have helped over 1,700 first-home buyers, but supply lags (only 706 homes were built last quarter, well short of the 1,306 target) underscoring the urgent need for faster approvals and more construction. Source: Corelogic, Property Council of Australia MELBOURNE, VIC Melbourne’s property market is showing early signs of recovery after a slow 2024. Two interest rate cuts, easing inflation, and steady employment have lifted buyer confidence, attracting both owneroccupiers and interstate investors. Demand is strongest in inner and middle-ring suburbs, driven by migration and limited new supply due to high construction costs and labour shortages. While price growth remains modest, the market appears to have bottomed after a 10–13% decline from peak values. Stock levels are normal, but buyers remain cautious and price-sensitive. Investor sentiment is impacted by state taxes and tighter regulations. Auction clearance rates sit between 60% and 69%, with well-priced homes performing well. Source: Corelogic
12 SYDNEY, NSW Sydney’s property market is showing clear signs of recovery, supported by economic improvements, policy incentives and a recent 25 basis point rate cut. Auction clearance rates are rising and buyer confidence is improving. Over the past year, median house values rose 1.2% to $1,473,393, while unit values saw a modest 0.1% annual increase to $851,934. First-home buyer schemes, such as the 5% deposit with no lenders mortgage insurance, are boosting affordability and access. While challenges remain, stable interest rates and lower entry costs are driving activity, especially in outer suburbs like Blacktown, Penrith, and Campbelltown. Infrastructure investment and targeted support are opening doors for young families and first-time buyers. As of mid-2025, Perth’s property market continues to outperform other Australian capitals, driven by strong demand, limited supply and favourable economic conditions. The median house price reached a record $770,000, up 2.7% in the March quarter, while the median unit price rose 4.0% to $520,000. Annual dwelling value growth hit 10.0%, leading all capital cities. High-quality properties are selling quickly, though demand for older homes with high strata levies has softened. Growth is fuelled by over 1,000 weekly interstate and international arrivals, sustaining housing demand. Construction faces skilled labour shortages, limiting new supply. While price growth may moderate, forecasts predict up to 10% growth in 2025, keeping Perth among Australia’s strongest-performing markets. Source: REIWA PERTH, WA
The Australian Property Report July - December 2025 13 Regional state overviews. Australia’s regional property market in 2025 is experiencing a mixed rebound, with growth in areas like coastal Queensland and parts of South and Western Australia, driven by infrastructure, lifestyle migration and investor interest. Other regions remain in recovery mode. As of mid-2025, regional NSW is seeing a modest recovery, with CoreLogic reporting a 3.2% annual rise in home values (houses up 3.5%, units 3.9%). Bathurst, Dubbo, and Wagga Wagga are leading the rebound, supported by infrastructure upgrades and more listings. While buyer activity remains below pre-2022 levels, lower interest rates and economic stability are helping steady the market. Newcastle is gaining traction as Sydney’s high costs push buyers outward. Its affordability, lifestyle and improved infrastructure are attracting interest, with suburbs like Mayfield and Stockton emerging as growth hotspots. Interest rate relief and improved economic clarity have reduced NEW SOUTH WALES Bathurst, NSW Newcastle, NSW “Remote work continues to drive strong demand for lifestyle properties, with Lake Macquarie, Newcastle, and the Hunter Valley attracting buyers seeking architect-designed homes with water views.” Source: CoreLogic uncertainty, but buyers remain cautious and selective. A clear shift is emerging: regional centres are now seen not just as affordable alternatives, but as long-term lifestyle and growth opportunities. – Anthony Di Nardo, Principal Belle Property Hunter Region
14 Queensland’s regional property market remains strong, driven by demand from local and interstate buyers seeking affordable lifestyle options. Centres like the Sunshine Coast, Toowoomba and Cairns are seeing solid growth, with median house prices under $700,000. Population growth, limited housing supply and low vacancy rates continue to push prices up. Infrastructure upgrades, such as Bruce Highway improvements and airport expansions, are boosting connectivity and economic activity. Government efforts to improve affordability and land use are helping ease supply pressures. With strong rental yields and rising demand, regional Queensland presents solid opportunities for investors and homeowners into 2025. Regional South Australia’s property market remains resilient and continues to outperform national averages in 2025. As of March, the median house price hit a record $476,000, up 0.18% month-onmonth and significantly higher yearon-year. Growth is driven by housing initiatives like the Rent-to-Buy scheme, helping renters save for a deposit through reduced rent. Renewal SA has committed $6 million into regional housing to develop over 200 new residential lots and rental properties across ten regions. Additionally, new legislation will enable around 61,500 homes on greenfield sites in areas like Murray Bridge and Victor Harbor, supporting job creation and economic growth. Interest rate cuts and government grants, concessions and infrastructure investment are also boosting buyer confidence, making the region attractive to both homeowners and investors. Source: PropTrack QUEENSLAND SOUTH AUSTRALIA
The Australian Property Report July - December 2025 15 Regional Victoria’s property market performance into the first half of this year has been mixed. While some towns like Geelong, Warragul, and Bendigo are showing solid buyer interest due to relative affordability (especially under the $800,000 mark), other regions are facing uncertainty from policy shifts and economic pressures. The statewide expansion of the Vacant Residential Land Tax has pushed some landowners to offload properties they’ve been holding, increasing listings but not always translating to strong buyer activity across the board. Meanwhile, rising costs and patchy infrastructure investment are tempering enthusiasm in smaller or more remote towns. While demand is healthy in some pockets, others are experiencing stagnation or softening, creating a fragmented and inconsistent market across regional Victoria. Western Australia’s regional property market is experiencing strong growth in 2025, driven by low housing supply, high rental yields and growing demand from local and interstate buyers. In 2024, regional values rose 16.1%, with growth continuing into this year. Broome led with a 25.41% rise in median house prices, while Mandurah, the South West and the Pilbara also saw strong gains, supported by lifestyle relocations and investor interest. While rural property activity has slowed due to tighter lending and limited land availability, overall market resilience remains. With REIWA forecasting up to 10% growth in Perth, regional centres are set to deliver similarly strong performances. Source: CoreLogic. REIWA VICTORIA WESTERN AUSTRALIA
16 Global Property Report 2025. The global luxury real estate market in 2025 is undergoing a period of dynamic transformation, driven by a confluence of economic stability, shifting demographics, and evolving lifestyle preferences. Investor confidence remains strong, buoyed by favourable macroeconomic trends such as declining interest rates, urbanisation and supportive tax environments in key economies. These conditions are providing a solid foundation for continued growth in the high-end property sector across the globe. A major trend shaping the market is the redistribution of global wealth, which is influencing buyer behaviour and investment destinations. Cities like Dubai, Singapore, and Lisbon have emerged as high-performance luxury markets. Their appeal lies in a combination of robust infrastructure, political stability and favourable investment programs. Portugal’s Golden Visa initiative, for example, continues to attract international capital by offering residency through real estate investment, highlighting how policy can influence global real estate flows. Equally transformative is the increasing prioritisation of sustainability. No longer an optional feature, environmentally responsible design is now a core expectation among luxury buyers. Properties constructed with ecoconscious materials and equipped with energy-efficient systems and smart technologies are commanding premium interest. Developers are responding by embedding sustainability into every stage of planning and construction, aligning luxury with longterm environmental stewardship. An example of this is Soneva, a developer building extraordinary luxury resorts and residences in the Maldives and Thailand, prioritising sustainability with every aspect from selection of building materials to their focus on marine conservation and mangrove and forest restoration. Lifestyle continues to be a dominant motivator for affluent buyers. High-networth individuals are investing not just in properties, but also in homes that support health, wellness and overall quality of life. Features such as spa-level amenities, outdoor spaces and biophilic design are in high demand, reflecting a shift toward homes that enhance wellbeing and personal fulfillment. This is especially true in resort-like settings seen in destinations such as the Caribbean, Hawaii and Greece, and urban enclaves that offer tranquillity without sacrificing connectivity, such as Sydney, Barcelona and Miami. Daniel Peros Vice President Global Operations Luxury Portfolio International
The Australian Property Report July - December 2025 17 We are also witnessing a significant shift in the demographic profile of luxury buyers. Younger, more diverse and increasingly tech-savvy, this new generation is reshaping the luxury market with a values-driven approach. They are looking for flexibility, cutting-edge technology and designs that reflect a conscious lifestyle. Homes that support remote work, environmental sustainability and seamless digital integration are at the top of their lists. This shift is prompting developers and real estate professionals to adapt their offerings accordingly. Amid ongoing global volatility, luxury real estate is reinforcing its role as a safe-haven asset. Investors are leveraging uncertainty as a strategic opportunity, acquiring high-value properties in global cities that offer long-term security and capital preservation. Inflationary pressures, shifting trade policies and geopolitical risks are all contributing to a recalibration of investment strategies, with real estate providing a reliable hedge and store of value. At the same time, supply constraints in iconic luxury markets such as New York, London, Tokyo and Dubai are intensifying competition for prime inventory. These cities remain highly desirable due to their cultural relevance, global connectivity and historic resilience. The scarcity of new high-end development in these markets is reinforcing price strength and creating upward momentum for premium property values. In summary, today’s luxury real estate market is shaped by adaptability, strategic growth and a stronger alignment with both personal values and broader societal trends. Buyers are now more informed, intentional, and diverse than ever. In this environment, success in the luxury market depends on understanding the nuanced forces at play, from macroeconomic shifts to lifestyle aspirations, and responding with agility, insight, and integrity. Biophilic urban building
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The Australian Property Report July - December 2025 19 When selling your home, it’s essential to combine global exposure with the strong local marketing expertise we provide. As an affiliate of Leading Real Estate Companies of the World®, we have the resources to showcase your property to the highest possible number of potential buyers. With a network of 138,000 associates across over 70 countries, we ensure your property receives unparalleled international visibility. Once listed on our local website, your home is immediately featured on LeadingRE.com and linked to the websites of 550 affiliate real estate firms worldwide. Find out more at leadingRE.com We can assist you anywhere in the world.
20 Rental market update. Australia’s rental market begins to stabilise, with easing vacancy pressures and emerging opportunities for strategic investors. A persistent housing shortage, combined with a period of consecutive interest rate increases (July 2022-November 2023) and ongoing waves of new rental regulations, has contributed to a severe mismatch between supply and demand in Australia’s rental housing markets. As a result, rental prices surged nationally by over 34% in just 3-4 years, one of the strongest growth periods the market has experienced. Most recently, however, we’ve seen early signs of a return to equilibrium. Vacancy rates, which had reached historic lows, are now trending back toward the 10year average of 1.6%. That said, demand remains particularly high in Brisbane, Sydney and Perth, where further rental increases are still being absorbed, indicating those markets are yet to fully stabilise. A key driver of the current imbalance has been the lack of a coordinated long-term supply strategy. Rapid interest rate hikes triggered an unanticipated wave of asset sales by investors, with many exiting the market due to tighter lending conditions and policy uncertainty (the lack of clarity, consistency, or predictability in the laws, regulations, or government policies that govern the rental sector). Fabian Ekker Head of Property Management Systems & Integrations This withdrawal of rental stock has not been offset by new supply, and prevailing lending standards continue to discourage reinvestment, particularly in the areas that need it most. As a result, the rental market’s supply challenges are not merely cyclical, but structural, and require a strategic policy response that supports both construction and investor confidence. Adding to this complexity are the most significant legislative reforms the rental sector has seen in over 30 years. Changes introduced across various states have redefined the rules around tenancy termination, extended notice periods, allowed tenants to keep pets more freely, and capped the frequency of rent increases. While these reforms aim to improve tenant security, they have created new compliance obligations for landlords and property managers, further complicating the investment landscape. 8 Clarence Street, Mount Lawley, WA
The Australian Property Report July - December 2025 21 Affordability pressures are now starting to influence vacancy rates. After reaching lows of 0.8%, vacancies have begun to rise modestly to levels between 1.2% and 1.9% in markets like Sydney. Nationally, the average sits around 2.29%, reflecting a broader normalisation of market conditions. This trend is expected to continue as broader economic factors, particularly interest rates and consumer confidence, exert their influence. Despite the challenges, opportunities remain for investors, particularly those with a medium to long-term outlook. As interest rates are expected to ease, we may see a cautious return of investors to the market, although this is likely to be focused on the more affordable unit segment rather than detached housing. Cities like Adelaide, Perth and Melbourne are beginning to attract attention, albeit not yet at a level sufficient to resolve the underlying supply issues. In short, while the market is showing signs of stabilisation, it remains in transition. Investors who navigate the evolving regulatory and economic landscape strategically can still find significant opportunities to optimise yields and grow the value of their assets. The current environment rewards patience, adaptability and a forward-looking approach to residential investment. Source: CoreLogic. 80 Louisa Road, Birchgrove, NSW
22 Commercial property report. Australia’s commercial property market is starting to pick up pace, thanks to more stable interest rates and growing confidence among investors. Large investment groups and trusts have resumed buying, particularly in Sydney and Melbourne, with a focus on topquality buildings in prime locations. The office sector is seeing mixed results. The best buildings, those located in CBDs with modern features, strong environmental performance and good access to transport, are performing well. Many companies are choosing these high-end offices to attract staff and create productive, attractive workspaces. Older and less updated offices, particularly in Melbourne, are lagging. Melbourne CBD office vacancy rates, while stable at 18%, are the highest they have been since 1997, as businesses move in search of better facilities, highlighting changing expectations around workspaces as companies seek more from their environments. A similar pattern is evident in Sydney and Brisbane, where demand continues to centre around premium office spaces in key locations. Hybrid and remote work are now a normal part of business life. As a result, many companies are downsizing or redesigning offices to meet evolving needs. Flexible workspaces and coworking hubs, especially in fringe city areas and suburbs, are growing fast. There is increasing demand for professional workspaces that combine flexibility with features such as wellness initiatives, sustainable design and strong public transport links. For landlords, this means older buildings need upgrades to remain competitive. Some are being retrofitted to improve energy performance and functionality, while others may be converted into housing or mixed-use spaces where upgrades aren’t financially viable. Industrial property remains the market’s strongest performer. Online shopping, logistics improvements and reshoring of supply chains are driving demand for warehouses and delivery centres, evident in locations such as near the soon-to-open Western Sydney airport 60-64 The Corso, Manly, NSW With investor confidence growing, Australia’s commercial property market enters a new phase of opportunity and adaptation.
The Australian Property Report July - December 2025 23 and Brisbane’s TradeCoast precinct. With vacancy rates at a low, developers are racing to meet demand by building new facilities, although rising construction costs and scarce land are proving to be obstacles. Investors are also turning their attention to other types of commercial properties. Healthcare buildings, scientific research spaces and data centres are gaining popularity due to their stable longterm demand. Meanwhile, residential developments specifically built for renting (“build-to-rent”) are gaining traction as a response to Australia’s housing shortage. Retail property, once seen as a weak spot, is evolving, blending traditional shopping with entertainment, food and digital experiences. Landlords are embracing technology to help tenants boost their sales and connect better with shoppers. It’s shaping up to be a year of transition and new opportunities for the Commercial Property sector. Source: Australian Property Council of Australia LUMINA, 68-72 Webber Parade, Keilor East, VIC
24 Continuing an upward trend reflecting both increased demand and a maturing industry, the short-term rental (STR) market in Australia has started the year with strong momentum. Listings on platforms like Airbnb have grown by 11% year-over-year, with total listings rising from 121,000 in 2021 to 132,000 in 2024. Australia now ranks 10th globally in terms of short-term rental listings, supported by a 25% increase in listings year-over-year, indicating a vibrant and competitive landscape for both investors and travellers. This growth is unfolding alongside significant regulatory change. From January 1st 2025, Victoria introduced a 7.5% levy on all STR bookings, a move that has already started to dampen new listings as owners reassess the financial return. In New South Wales, a 180-night cap on non-hosted properties has been implemented, while Byron Bay has imposed a strict 60-night annual limit outside of a small exemption zone. These changes are reflective of broader political and community pressures to manage housing availability, especially in tourismheavy areas. Despite these challenges, demand for short-term stays remains strong, though we are seeing shifts in guest behaviour. There is a noticeable trend toward shorter booking windows and reduced length of stay, driven in part by high interest rates and cost-of-living pressures. Travellers are booking closer to their travel dates and staying for shorter periods, but interestingly, they are still opting for premium, high-quality accommodations when they do travel. This shift underscores the continued resilience of the luxury segment, particularly among leisure travellers. A defining feature of the current market is the rise of the eco-conscious traveller. Demand is growing for properties that not only provide comfort and aesthetic appeal but also align with sustainable values. Energy-efficient appliances, solar power and environmentally friendly construction methods are increasingly seen not just as desirable but as differentiators. Guests are also paying attention to operational practices. Properties that minimise printing, use eco-aware signage and Short term rental market report. Lantern Apartments, Thredbo, NSW Australia’s short-term rental market continues to grow, despite tightening regulations and shifting traveller behaviours.
The Australian Property Report July - December 2025 25 Coolum Beach, QLD Disclaimer: Whilst all care has been taken to ensure accuracy in the preparation of the particulars herein, no warranty can be given, and interested parties must rely on their own enquiries. support local sustainable initiatives are gaining a reputational and competitive advantage. Flexible cancellation policies and seamless check-in experiences are no longer perks; they are fast becoming standard expectations. From an investment perspective, certain regions continue to outperform. Sydney, Melbourne, the Gold Coast and the Sunshine Coast are maintaining strong occupancy rates, with Sydney averaging 77% and the Gold Coast at around 80%. These markets, especially beachside and inner-city locations, remain reliable performers. At the same time, more investors are turning their attention to emerging regions like Perth, Fremantle and Hobart, where occupancy rates and the number of listings are both on the rise, offering new opportunities for early movers. Still, parts of the markets are seeing the impact of new regulations. Byron Bay has seen a marked decline in occupancy, now sitting at 66%, largely due to its 60-night cap. Properties in the small exemption zone, however, continue to perform exceptionally well with 83%+ occupancy. Noosa, once one of the top performers, is also seeing signs of market saturation. A surge in listings has diluted demand, reducing occupancy from over 81% to around 74% and putting downward pressure on average daily rates, particularly outside peak seasons. The ultra-luxury market in these regions continues to be an exception, holding steady despite broader declines. Throughout these changes, the role of advocacy has grown in importance. The Australia & New Zealand Short Term Rental Association (ASTRA) has stepped up as a critical voice for the industry, working to negotiate fair regulation and offer guidance to operators. Their engagement with local and national governments has helped balance the interests of communities with those of property owners and guests, though challenges remain as more jurisdictions consider tighter controls on STR activity. Looking ahead, competition is expected to intensify, particularly in high-growth and emerging markets. For operators and investors, this will require a more refined approach to pricing, guest experience and differentiation. From a traveller’s perspective, this competition translates into more choice, better value and an expanding range of accommodation styles and experiences. In a market that is simultaneously expanding and consolidating, success will come to those who can adapt. (*data Airbtics, AirDNA)
Expertise you can trust. belleproperty.com/southwest Scan to learn more Mat Moulton Acton | Belle Property South West 0438 523 456 mat.moulton@belleproperty.com
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