Property Prices Over the Next 5 Years: What Every Investor Needs to Know

Source: Domain

Australia’s property market has always been a topic of hot debate, but if there’s one thing economists agree on—it’s that the next five years will bring growth, even if it's not the wild ride we saw during the ultra-low interest rate era.

The core of the price forecast comes down to a simple economic equation: low supply + strong demand = price growth.

With a construction slump, high population growth, low unemployment, and wage increases, we’re looking at a perfect storm for sustained growth across most capital cities. Add in the slow progress toward the federal government's 1.2 million homes target by 2029, and supply will remain constrained—especially for freestanding houses.

Melbourne’s property market has been playing catch-up. While Sydney soared with a 28.2% price increase over the past five years, Melbourne only notched 8.2%. With better affordability compared to Sydney, and a large migrant intake resuming, Melbourne’s lower base makes it ripe for a rebound—especially in areas where supply is limited and lifestyle appeal is high.

Sydney’s challenge is affordability. With prices already stretched and limited supply response, its growth may be more moderate—though not completely off the table. One interesting twist? The “missing middle.” Suburbs that resist high-rise development but urgently need townhouses and medium-density options may see strong demand and price appreciation—especially close to transport, jobs, and lifestyle precincts.

With more buyers squeezed out of the housing market, demand for townhouses and mid-rise apartments will continue to rise—particularly those close to transport hubs and lifestyle precincts. Most of the 1.2 million new homes targeted by the government will be apartments. While this may ease apartment prices in some high-density zones, it won’t impact prices of houses in established suburbs.

The next five years won’t be a repeat of the last property boom, but growth is coming—just with more nuance and variation across cities and housing types.

Whether you're an investor, first-home buyer, or downsizer, the key is to understand where demand is going, what’s in short supply, and how macro trends are shaping buyer behavior.

Key Takeaways:

• Prices likely to rise due to supply constraints and strong demand.

• Melbourne may outperform after underwhelming past growth.

• Sydney still attractive but weighed down by affordability.

• Brisbane has strong economic and infrastructure tailwinds.

• Detached housing will outperform, but affordable multi-unit dwellings will remain in high demand.

• Interest rates may fall modestly, but won’t be the main growth driver.

• External risks (e.g., US economy) could shift investor behavior.

Now’s the time to look beyond short-term noise and position for the next phase of market growth.

If you have any questions or need any information about Australian property, buying Australian property, selling property or looking for property management, you can leave a message or WhatsApp +61 481 988 806 to contact real estate expert, Entre Shield Property, we have the most professional sales consultants to answer any related questions for you!

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