As 2025 draws to a close, it’s time to pause, reflect and gaze into the future. Across Australia, our cities and towns are gearing up for their own unique New Year’s celebrations – from Sydney’s world-famous fireworks lighting up the harbour, to relaxed festivals and beachside soirees on the coast. Beyond the festivities, our property market has its own milestones and highlights to celebrate. 2025 has seen renewed investment in infrastructure, a bigger focus on sustainability, and changing dynamics around how Australians buy, sell, and invest.
So, before we toast to 2026, we’re recapping the standout property trends, sharing our predictions for the year ahead, and finally, highlighting the best places to ring in the New Year.
Key property highlights from 2025
Overall, 2025 was a year of renewed confidence as stronger migration trends and a continued mismatch in supply and demand dominated the property landscape. According to Cotality’s August 2025 Housing Value Index, national home values rose almost 4% over the year, with Perth, Adelaide and Brisbane leading the charge. Regional areas – particularly Queensland and Western Australia – also recorded solid gains. Here are the key highlights from across the year:
1. Uplift in urban renewal and infrastructure investments
Major cities like Sydney, Brisbane, and Melbourne saw renewed investment in transport and infrastructure projects, reshaping suburbs and creating fresh growth corridors. According to Infrastructure Australia’s 2025 Annual Statement, over $200 billion is allocated in the major public infrastructure pipeline (MPIP) over the next 5 years to 2028. This investment prioritises high productivity freight corridors, port capacity and connectivity, high-capacity transport for fast-growing cities, secure and sustainable water projects, and clean energy solutions. From a housing perspective, these aim to increase accessibility and liveability across capital and regional cities.
2. Lifestyle-driven moves continue
We started the year with nearly 60% of professionals considering regional relocation viable due to flexible work models, the call of increased space, greater affordability and a lifestyle shift continued to lure buyers to coastal and regional properties across Australia throughout 2025. A recent study from the University of Sydney found that more people have been leaving Australia’s capital cities for regional areas than moving in from regional locations – a consistent pattern nearly every year since 2007. As a result, increased demand for housing in many regional areas has led to low vacancy rates, rising rents and higher property prices.
3. Increased focus on sustainable and smart homes
Green living became more than just a buzzword in 2025, as buyers actively sought and were willing to pay more for energy-efficient homes. Domain’s recent Sustainability in Property Report noted that energy-efficient houses are selling for almost 15% more than their less sustainable counterparts, with some suburbs seeing premiums as high as 75% for homes with standout features. Key money, time, and energy saving trends include investing in smart home features and simple home upgrades like solar, improved insulation, and efficient appliances.
4. Shifting rates, shifting investment dynamics
Earlier in the year, higher interest rates increased pressure on investors, prompting many to focus on rental yield growth in emerging markets. According to the National Housing Supply and Affordability Council’s recent report, rental markets remain tight, with vacancy rates across most capital cities remaining below long-run average levels. However, as recent RBA rate cuts have come to the fore, many investors are re-entering the market to capitalise on improved borrowing conditions and leverage equity in existing property to expand their portfolios.
Looking ahead – what will 2026 hold?
While 2025 brought some stabilisation and cemented existing housing trends, the property market is already buzzing about what 2026 may bring. The consensus? Slow, steady and cautious growth, with analysts forecasting national values to rise around 5% over the year ahead. Here’s why:
- Government support continues
Government schemes like Help to Buy, the expanded Home Guarantee and the Housing Australia Future Fund continue to support first-home buyers in purchasing their dream home, and assist developers in entering the market. This bolsters demand.
- Improved borrowing conditions
With many economists predicting further rate cuts from the Reserve Bank in 2026, interest rates and borrowing conditions are expected to improve. This will ease pressure on borrowers and boost demand from first home buyers, investors, and upgraders.
- Could the scales tip on supply and demand?
Australia continues to face a national housing shortfall, with demand outpacing supply. Around 220,000 new dwellings are needed annually, yet completions are closer to 170,000. While migration and construction pressures may ease, the supply-demand imbalance will remain a key market factor.
We’re also predicting that conversations about urban density will continue as buyers turn to more affordable housing solutions, and the uptake of tech in the real estate industry will soar. This includes the use of AI for property valuation and management, as well as augmented and virtual reality for immersive property viewings. Keep an eye out in January for a more comprehensive forward-looking forecast for 2026.
Ready to toast to 2026?
After a slightly more optimistic end to 2025, and beacons of hope on the horizon for the property market in 2026, it’s time to dust off the dancing shoes and celebrate the year ahead. Whether you’re into sunrise yoga, lively laneways or epic fireworks displays, here’s where to find the best spots to ring in the New Year:
- Sydney’s fireworks on the Harbour
Guy Fawkes step aside, Sydney’s fireworks are where it’s at! Spectacular displays shoot from the sky over the iconic backdrop of the Opera House and Harbour Bridge, pulling in huge crowds of locals, visitors, and even online viewers. It really is the best place to welcome the New Year with a bang!
- Melbourne’s buzzing nightlife
With a mix of fireworks, concerts, buzzing laneway parties and rooftop soirees, Melbourne’s got it all going on at New Year’s Eve. Federation Square and the Yarra River are popular spots to soak up the festivities, but you’ll find the whole city buzzing.
- Chilled coastal celebrations
From the Gold Coast to Byron Bay, beachside festivals, fireworks, live tunes, and sunrise yoga set the scene for a laid-back New Year. Expect salty air, summer vibes and that signature coastal charm that continues to draw visitors and new residents to Australia’s coasts.
- Raise a glass in the regions
Looking for something low-key? The wine regions like the Barossa Valley and Margaret River serve up intimate vineyard parties and gourmet dining experiences served alongside good conversation and a glass of your favourite local vintage. Book early to avoid disappointment.
- Darwin’s waterfront comes alive
really knows how to put on a show for the whole family! This year, The Wharf Precinct will come alive with food, drinks, local musicians, a neon disco and of course, fireworks. With two spectacular fireworks shows – family fireworks at 9 pm and then the main event at midnight – it promises to be a night of pyro fun for everyone.
- Adelaide’s riverfront revelry
Elder Park and the Riverbank turn into party central, with local musicians and entertainers, food stalls, and two firework displays over the Torrens ringing in the New Year. It promises to be a safe, inclusive space for families and friends to celebrate.
- Fireworks, fine dining, and river views in Brisbane
From rooftop bars to riverside dining, Brisbane’s got plenty of sparkle going on over New Year’s Eve. The Star Brisbane is the place to be – with delicious dining, rooftop views of the fireworks over Brisbane River, and live entertainment to keep the celebrations going all night long.
- Family fun in Canberra
The Capital is a great place to be with the family this New Year’s Eve. Head to Commonwealth Park with a picnic and enjoy face painting, games, and plenty of entertainment for the kids, then grab a spot on the grass at Lake Burley Griffin for food trucks, live music and of course, fireworks! the vibrant buzz that comes with live music,
- Indulge in a Taste of Summer in Hobart
Revel in the relaxed festival atmosphere as the Taste of Summer New Year’s Eve party serves up DJs, live music, and Tassie’s finest food, wine, and cocktails – all in the perfect spot to watch the fireworks light up the harbour.
- Party under Perth’s western sky
Whether you’re searching for sandy beach parties, romantic river cruises, sky-high rooftop celebrations, or some good old-fashioned fireworks, Perth has it all. For a family-friendly night out, head to Elizabeth Quay and settle in to watch the fireworks light up over the Swan River.
New year, new beginnings
As the fireworks sparkle and the champagne flows, welcoming in a new year is an excellent opportunity to reflect on the year gone by and to look ahead at what’s next. Whether you’re hunting for your dream home or seeking home buying tips now is the perfect time to plan your 2026 property goals. Speak with the team at your local First National Real Estate office for a free property appraisal or buyer consultation and take the first step toward your fresh start in the New Year. From all of us at First National Real Estate, wishing you a Happy New Year!
DISCLAIMER
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions. Click here for full Terms of Use.