House prices in Sydney and Melbourne are set to fall further in 2025, while Perth is likely to experience the strongest growth among capital cities, according to SQM Research’s latest Boom and Bust Report. It forecasts the biggest property price falls in Canberra, where there is a surplus of properties on the market and rents have flatlined. Average national home prices are forecast to rise by between 1 and 4 per cent, under a base case scenario, which assumes the Reserve Bank will cut interest rates mid-year, population growth will continue at 500,000+, and there’s no resurgence of inflation. Louis Christopher, managing director of SQM Research, says one or two interest rate cuts from the RBA will lead to buyer confidence in Sydney and Melbourne but those markets are still expected to finish the year behind where they started in 2025. He expects strong population growth and an ongoing shortage of new dwellings will likely continue in 2025.
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