Navigating the 2025 property market: A promising start to the year

With over 25 years’ experience in the property industry, most recently as Managing Director of Jellis Craig Stonnington and Yarra, Jellis Craig CEO Andrew McCann’s insight and expertise are invaluable. We were delighted to sit down with Andrew to get his perspective on what the property market has in store for the year ahead.

The Reserve Bank of Australia’s long-awaited interest rate cut is a key driver of Melbourne’s property market recovery in early 2025. While the initial reduction is a modest 25 basis points, it signals the potential for further cuts, boosting buyer confidence and stimulating market activity. As we move through the first quarter, the market is showing strong signs of growth, setting a promising tone for the year ahead. 

Price corrections in 2024 have contributed to a more balanced environment for buyers and sellers. Year-on-year, Melbourne house prices are down by 2.6%, and unit prices have decreased by 1.6%¹. When compared to other markets around the country – such as Queensland, Brisbane, the Gold Coast, Sydney, and Adelaide - Melbourne has been playing catch-up in terms of capital gains. This has created a window of opportunity for strategic investors, with the market poised for recovery in the coming months.

Stock levels are showing positive growth, with the total number of properties available for sale in Melbourne increasing by 8.0% year-on-year in December¹. This increase in listings has led to higher attendance at open for inspections during this first round of property sales in early 2025, with a significant influx of new buyers entering the market. At Jellis Craig, we’ve seen a 10-20% increase in attendance at open homes compared to last year. This uptick in activity is driving greater competition - a key ingredient for price growth and market momentum. As competition increases, those looking to buy should be prepared for a more dynamic and competitive environment.

The looming federal election adds a layer of complexity to the market. Historically, potential changes in government have triggered positive sentiment in the property market, as we saw in the past two elections. While there are no immediate shifts in consumer sentiment tied directly to the election, it is likely to create certain scheduling challenges. Historically, sellers and agents tend to avoid listing properties in the weeks leading up to an election due to the heightened uncertainty and the noise generated by political commentary. Assuming the election takes place in early May, we expect home sellers to list properties earlier - around March - followed by a surge in activity post-election, particularly in the second half of June