Groundswell Property's Market Insights
Affordability Drives Migration, Renters Struggle, and Rate Cuts Loom: Key Insights at 19 April 2025
Welcome to this week’s edition of Groundswell Property’s Market Insights, where we cut through the media noise and deliver real, data-driven updates on Australia’s ever-changing property market.
Image source: Luisa Denu, Unsplash
As the federal election looms, both major parties are pitching solutions to Australia’s housing crisis. Meanwhile, renters feel the squeeze, internal migration patterns shift, and economists tip interest rate cuts just around the corner.
Key Highlights:
🗳️ Housing policy goes political: Labor and the Coalition unveil competing plans to boost home ownership
📈 Rents keep rising: Up 14.2% in two years, with Perth, Brisbane, and Sydney leading the surge
🏃 Sydneysiders head north: Over 129,000 residents have left Sydney since 2021 due to affordability
🧱 The ‘missing middle’ solution: Calls grow for medium-density housing in existing suburbs
💰 Rate relief incoming? NAB and AMP predict RBA will start cutting rates from May
As always, our goal is to provide evidence-based insights to help you make informed property decisions—whether you're buying, selling, or simply keeping a pulse on the market. Let’s dive into the data and insights shaping the year ahead.
Political Parties Housing Plans Go Head-to-Head
Labor and the Coalition have launched housing policies aimed at helping more Australians onto the property ladder ahead of the 2025 federal election.
The Coalition’s plan, led by Peter Dutton, offers first-home buyers of new builds a tax deduction on interest paid for the first $650,000 of their mortgage for up to five years. Means-tested at $175,000 (singles) and $250,000 (couples), this measure is expected to cost $1.25 billion.
Labor’s plan, announced by Anthony Albanese, expands the First Home Buyer Guarantee to all first-home buyers, removing income caps and increasing property price limits (e.g. Sydney: $1.5M). It also includes a $10 billion investment to build 100,000 homes for first-home buyers, with $2B in grants and $8B in zero-interest loans.
Labor says these homes will be built on underused government land, with access determined in partnership with state governments.
Both parties promise solutions—but with different routes to the same goal: increasing home ownership.
Rents Rise, Relief Lags
Rents have surged 14.2% over the past two years—more than double Australia’s inflation rate of 6.6%—according to Money.com.au’s analysis of ABS data. After rising 7.3% in 2023 and 6.4% in 2024, projections suggest rents could jump another 18% by 2030.
Money.com.au Property Expert Mansour Soltani said the divide between renters and homeowners is widening: “Inflation is easing for most, but rents keep rising. Renters are bearing the brunt of the housing crisis.”
Perth leads with a 19.9% rent hike over two years, followed by Brisbane (15.8%) and Sydney (15.4%). Melbourne (12.7%) and Adelaide (12.2%) also rose, while Darwin and Canberra had smaller increases. Hobart was the only city with a decline (-1.5%).
Nearly half of renters (47%) say they’d move to find cheaper rent, with 14% currently looking. Gen Z and Gen X renters are most affected.
With population growth, low vacancy rates, and housing shortages, Soltani warns the crisis could mirror the prolonged rental surge seen during the GFC.
Sydneysiders Chasing Homes, Leaving Cities
New data shows Sydneysiders are leaving in record numbers, with housing affordability driving the exodus. Between 2021–2024, Sydney lost over 129,000 people to internal migration — more than any other capital. Last financial year alone, 41,000 residents left, outpacing the city’s natural population increase.
While Melbourne and Darwin also saw population declines, Brisbane, Perth, and regional Queensland led net domestic migration gains. Brisbane attracted 56,100 newcomers, followed closely by regional Queensland (54,900) and Perth (27,500).
According to the e61 Institute, housing costs are a key factor, especially for those in their 30s. As Sydney’s median house prices remain out of reach for many, younger Australians are looking elsewhere for affordable homes.
However, rising prices in Brisbane and regional Queensland may soon slow this trend, as the gap between Sydney and other markets narrows.
With affordability, demographics, and lifestyle all in play, the shifting flow of Australians seeking better living conditions is set to continue.
Future-Proofing Our Suburbs
Australia urgently needs 1.2 million new homes in the next five years — and the Housing Industry Association (HIA) believes “gentle density” could be the key.
Gentle density refers to medium-density housing like townhouses, duplexes, and micro-lots, built within existing suburbs to boost supply without compromising community character.
HIA Executive Director of Planning, Mike Hermon, says:
“Australia’s housing crisis is at a tipping point, and one of the answers lies in embracing gentle density to unlock the missing middle housing solutions.”
Instead of relying solely on costly greenfield development at the urban fringe, HIA proposes smart infill in well-serviced suburbs. Current zoning laws are outdated, often limiting options to either high-rise apartments or large detached homes.
The HIA is calling for streamlined approvals and more flexible planning to support diverse housing where infrastructure already exists — near jobs, schools, and public transport.
It’s a strategic step toward fixing the housing crisis without sacrificing the livability of our suburbs.
Banks Tip Rate Easing
National Australia Bank now expects the Reserve Bank to begin cutting rates from May, forecasting a 50 basis point reduction, followed by a series of 25-point cuts through to February 2025—bringing the cash rate to 2.6%. The shift follows global uncertainty after US President Donald Trump paused plans for sweeping tariffs, excluding China, which had rattled financial markets.
NAB economists said, “A restrictive policy stance in Australia is no longer appropriate, in our view,” citing global risks and domestic weakness.
Deutsche Bank and AMP also updated forecasts, with AMP’s Shane Oliver stating, “I think we will see a cut in May and there’s a good chance we will see several more cuts this year.”
Despite recent global developments, Westpac and CBA have held their cash rate expectations steady.
Though Australia’s direct exposure to tariffs is limited, concerns remain over reduced global demand, especially from China, which could hinder Australia's economic recovery.
Key Takeaways
As we edge closer to the next federal election, housing is once again dominating headlines — and for good reason.
The combination of surging rents, stretched affordability, and population shifts is forcing both investors and policymakers to rethink what the future of Australian housing looks like.
The message from the data is clear:
Renters are under pressure, with record-low vacancy rates and rising weekly costs
Affordability continues to shape migration, especially out of Sydney and into regional hubs and South East Queensland
Medium-density housing is emerging as a critical part of the supply solution, but planning hurdles remain
And with inflation easing, the prospect of rate cuts could be the turning point investors have been waiting for
In times like these, successful investors aren’t just reacting to headlines — they’re paying attention to the deeper trends that drive performance over time.
We’ll continue tracking the data and delivering the insights that matter most.
Success in property comes down to having the right information, the right team, and the right strategy. If you want to make your next move with the confidence and preparedness needed to get the best result, get in touch via 0439754475
Keep an eye out next Saturday for more insights.
Tom Haigh
Director & Licensed Buyers Agent
Groundswell Property - Established 2015
tom@groundswellproperty.net
0439754475