‘Business as usual’: Industry leaders predict 2025 property recovery

Australia’s property sector will return to ‘business as usual’ next year, with looming interest rate cuts and foreign investment likely to turn the sector’s fortunes around, property leaders say.  

Property developer and investor activity has waned under higher interest rates, dampening confidence and weighing on new construction and investment in recent years.  

But industry leaders were optimistic about their prospects in 2025 and told the Property Council of Australia’s Property Congress in Townsville that next year was set to see a turnaround for property players.  

Mirvac group chief executive Campbell Hanan said interest rate cuts – which the market expects to start in the first half of next year – would help stimulate Australia’s property market. 

“I certainly feel more optimistic now than I have felt at any time in the last 18 months,” Mr Hanan said. 

“Ultimately, I think interest rates will be the thing that turns the cycle the fastest.  

“There’s a huge amount of pent-up demand in housing in Australia and there’s a huge number of Australians who have been locked out of the market because of interest rates, and that affordability angle will change as the interest rate cycle starts to move.”  

Property Council president and Charter Hall Office chief executive, Carmel Hourigan, said domestic and overseas investors were curious about Australian property. Picture: Supplied

ISPT head of property Amanda Steele said strong interest from foreign investors was also bolstering optimism down under.  

“When you compare Australia to overseas, we are in really good place,” Ms Steele said.   

“I just had two weeks in Europe speaking to foreign investors, and they are so much more positive than our local investors, disappointingly, but that foreign capital sees this market as so strong. 

“When they’re looking at their [Asia Pacific] allocations, they’re seeing Australia and Japan and they’re the only two markets that they’re talking about.”  

Ms Steele said strong rule of law, population growth and positive ESG credentials were putting Australia ahead of other markets.  

Property Council president and Charter Hall Office chief executive, Carmel Hourigan, said many investors were still waiting for cap rates, or property investment returns, to stabilise. 

“We’re seeing a lot of curiosity from capital, both domestically and internationally,” she said.  

Mirvac chief executive Campbell Hanan said interest rate cuts would help stimulate Australia’s property market.

Industrial and retail property markets were already starting to show signs of stabilising cap rates, Ms Hourigan said. 

“This year, there’s still a lot of volatility and we would hope that next year there’ll be less, but I think we’re just in volatile times, so that’s not going to go away. 

“But we would say that you’ll look back and think I wish I’d been a bit more courageous in some of the decisions that I made if I knew what I know now.”  

Scape co-founder and chief executive Craig Carracher said next year would see a return to “business as usual” in Australian property. 

“We all think that next year is business as usual and I think we’ll look back next year and say this year was business as usual, and we should have been in the market now,” Mr Carracher said.  

“I think we’ll look back and say ‘gee, 2024 looked pretty good, didn’t it?’”