Australia’s property market continues to show dynamic movement this winter, with Perth and Adelaide leading the way in annual growth. As of May 31st, Perth and Adelaide each recorded an impressive 8.6% increase in property values over the past 12 months. Brisbane followed with 7.1%, while Sydney and Melbourne have experienced a softening in their respective markets.
Perth’s property market, in particular, remains in a growth phase according to Herron Todd White, with median values reaching $813,810. This still positions Perth as one of the most affordable capital cities, especially when compared to Sydney’s $1.2 million median and Brisbane’s nearly $ 918,000 benchmark.
In a move that could further stimulate buyer activity, interest rates decreased by 0.25% in May. This shift enhances borrowing power, making it easier for more buyers to consider entering the market. However, it's worth understanding how lenders assess borrowing capacity. Rather than calculating based solely on the current interest rate, banks apply a buffer, known as the Qualification Rate, which currently stands at 3%. This buffer ensures that buyers can still manage repayments if rates were to rise again.
The recent rate cut will benefit not only new buyers. It may also bolster current loan applications in progress by reducing the effective assessment rate, strengthening the chances of approval for some borrowers.
For buyers in Western Australia, the timing may be ideal. Perth’s strong yet comparatively affordable market offers opportunities to secure a property before further growth continues to push prices higher. With the dual benefits of rising property values and improved borrowing conditions, market confidence is likely to remain high in the months ahead.
Whether you're planning to buy, build, or invest, staying informed about lending conditions and local market trends is crucial for making informed property decisions in 2025.
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