News headlines always present the most eye-catching information. If you have seen recent articles about a property downturn, you are probably wondering what this means for your home.

There’s no doubt the market has slowed, but take a look at what is really happening:

What is happening to Australian property prices?

Property values surged significantly during and after the pandemic in Australia, with gains being driven by high demand, limited supply and rising construction costs. Prices seemed to be on an interminable upwards trajectory, ignoring any suggestions about a ‘fixed rate cliff’ or price correction.

After several years of growth, recent data finally suggests that the housing market is slowing down as we enter 2025. However, this is far from a ‘crash’.

Looking beyond the headlines, statistics say national home values across Australia dropped by 0.1% in December 2024. CoreLogic explained that Sydney and Melbourne (the largest housing markets) led the decline, with Sydney seeing a 0.6% drop in December (and a 1.4% drop in the last quarter of the year), while Melbourne dropped by 0.7% in December (and a 1.8% decline over the same quarter).

These numbers are relatively minimal when you consider that national prices still rose by 4.9% in 2024, adding an average of $38,000 to the median home value. There are also cities and regional areas that are still experiencing relatively strong growth.

Will property prices keep dropping in 2025?

From all the available data, it doesn’t look like property prices will fall significantly in 2025, with experts saying a drop will be “shallow and short-lived”.

The current slowdown has been created by a gap in prices and affordability. With interest rates high and the cost of living putting a squeeze on people’s budgets, buyers can’t afford to bid high. This is what has led to a slower market.

While prices might soften through 2025, property experts are not forecasting an extended downturn or massive drop because demand is still outstripping supply. What’s more, any slowdown is likely to be reversed when interest rates are finally reduced and people find they have more spending power.

Should you sell in early 2025?

If you’re thinking about selling your home early this year, don’t panic about a slower market. For one thing, there are still buyers out there, especially if you have a quality home in a good area.

Keep in mind as well that as soon as you sell you become a buyer. In this case, a slower market will be to your advantage.

The other factor is location; if you’re in a sought-after area it’s likely you can still sell for a premium. For example, Perth, Adelaide and Brisbane saw values surge by between 11.2 and 19.1% over the last twelve months.

Thinking of selling? Speak to an expert

The key to making smart real estate decisions is professional advice. Whether you’re selling, buying or exploring your options, an experienced agent can provide insights that are specific to your property, your location and your personal goals.

Need a guide to navigate a fluctuating market? Reach out at teresa@teresaberger.com.au today.