Why Geelong buyers can expect home prices to rise in 2025

Homebuyers can expect higher Geelong house prices in 2025, no matter which party wins government on May 3.

PropTrack senior economist Anne Flaherty said with both major parties targeting helping out first-home buyers in the election, higher prices were the most likely outcome, particularly with interest rates also set to fall.

Ms Flaherty said the impact of the housing policies would be keenly felt in Geelong due to the higher amount of first-home buyer activity in the region.

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“Whoever wins, both sides are going to bring in policies that increase first-home buyer demand and are very likely to push prices higher,” Ms Flaherty said.

“They’re demand-side policies, so it’ll make it easier to get into the market.

“Unfortunately though, they’re not policies that are going to make housing itself more affordable. They’ll probably increase demand.

“If you combine those demand-side policies with the prospect of lower interest rates, it seems inevitable that home values will move higher.”

Ms Flaherty said increasing the supply of new homes can help keep a lid be kept on rising house prices.

PropTrack economist Anne Flaherty said key first-home buyer policies wouldn’t make housing itself more affordable.

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“If we compare Melbourne and Geelong to a lot of other capitals and regions around Australia, one of the reasons why our price growth has been significantly slower here is to do with the fact that, historically, we have been better at supplying more new housing, which means that as our population grows, the pace of housing supply is keeping up,” she said.

“Now we’re starting to see a consistent under-supply of homes being built relative to the population growth we have in Victoria and that’s going to be another key factor that could contribute to higher prices.”

The recovery in Geelong house prices gathered momentum in April despite public holiday long weekends and the federal election campaign dampening activity.

PropTrack’s Home Price Index showed dwelling values continued to climb, contributing to a quarterly rise of .31 per cent to a $725,000 median dwelling value.

The median house price reached $757,000, with unit values seeing a slight dip to a $529,000 median price.

“If you look at the fundamentals of Geelong’s property market, there’s strong population growth and there’s good connectivity into Melbourne,” Ms Flaherty said.

“It’s ticking all the boxes but for quite some time that home price growth has been very subdued.

Real Estate Institute of Australia president Leanne Pilkington said new inflation figures support an interest-rate cut in May.

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“So now we’re really starting to see some first evidence of consistent price rises.”

Meanwhile the latest Consumer Price Index results shows inflation fell within the Reserve Bank’s target band, increasing speculation that a May interest rates was increasingly certain.

Real Estate Institute of Australia president Leanne Pilkington said the most significant price rises were housing (up 1.7 per cent), food and non-alcoholic beverages (up 1.2 per cent) and education (up 5.2 per cent).

“Rents increased by 5.5 per cent over the 12 months to the March quarter, down from 6.4 per cent in the December quarter – the fourth consecutive quarter of lower increases and the lowest 12 month increase since March 2023.

“The figures support market expectations of an interest-rate cut when the RBA meets in May followed by further rate cuts during 2025.”