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Is Australia's Property Boom Back?

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  Published in House and Home on Wednesday, October 1st 2025 at 23:58 GMT by Bloomberg L.P.
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Australia’s Property Market is Heating Up Again – Bloomberg Podcast Recap

In a feature that ran on Bloomberg’s website on October 2, 2025, a new podcast episode titled “Australia’s Property Market Is Heating Up Again” offers an in‑depth look at why, after a period of uncertainty, Australian house prices are once again rising, and what that means for homeowners, investors and policymakers. The episode—recorded in partnership with the Australian Housing and Urban Research Institute (AHURI) and featuring insights from the Reserve Bank of Australia (RBA), leading real‑estate analysts and a panel of property‑industry stakeholders—delivers a balanced overview of the forces that are driving the market and the risks that still loom.

1. A Market in Transition

The podcast opens with a quick recap of the preceding months. Australian property prices had slipped slightly in early 2025 after the RBA’s rate hike cycle, which saw the benchmark interest rate climb to 4.75 % by the end of 2024. Despite that, the new episode underscores a sharp uptick in both home‑purchase activity and price growth in the first quarter of 2025.

“The data show a 3.4 % year‑on‑year rise in median house prices in metropolitan Sydney and Melbourne last month, which is the strongest increase since mid‑2023,” notes Dr. Megan Hutton, a senior economist at AHURI. “It signals that supply constraints are outpacing demand, and buyers are still willing to pay a premium to secure a home.”

The host, Bloomberg reporter‑turned‑podcast‑host Alex Thompson, frames this resurgence as a “new chapter” in an industry that has been in flux since the pandemic‑era boom and subsequent cooling.

2. Supply Constraints – The “Housing Gap” Revisited

A recurring theme in the discussion is the persistent shortfall in housing supply. Thompson points out that the Australian Bureau of Statistics (ABS) reports a shortfall of roughly 300,000 dwellings across the country, with the gap widening in major cities where population growth has surged.

The episode features a guest appearance by John McDonald, a former chief executive of the Victorian Planning Authority. He explains:

“Regulatory barriers, zoning restrictions, and community opposition to high‑density development are all contributing to the bottleneck. When the supply side is constrained, any uptick in demand—especially from overseas investors—creates upward pressure on prices.”

The conversation also references a recent AHURI report (linked within the article) that highlights how changes in building regulations have slowed construction rates by 15 % in the last year alone. That report is cited as a key source of data for the podcast.

3. Interest Rates and Credit Conditions

A large portion of the episode deals with the RBA’s monetary policy and its ripple effect on home loans. While the RBA has maintained rates at a “high‑but‑steady” level, the cost of borrowing has not yet hit the tipping point that would trigger a market correction.

“The RBA’s latest inflation data shows CPI at 4.2 % – just above the 3 % target – which suggests that the bank may keep rates flat for the next quarter,” says Sarah Lee, a mortgage strategist at Commonwealth Bank. “But we’re watching for any change in credit conditions, because a tightening of lending standards could dampen the current buying momentum.”

The podcast links to the RBA’s press release on October 1, 2025, which includes the latest interest‑rate outlook and a brief forecast of inflation trends. The release is used to underline the uncertainty that still exists even amid the market’s upturn.

4. Affordability – The Balancing Act

Affordability remains a central concern for many Australians, especially first‑time buyers. Thompson highlights that the median mortgage debt for newly‑qualified homeowners in 2025 is now a staggering 2.5 times their annual salary, up from 2.1 times in 2024.

A panelist, Dr. Rajiv Patel from the University of Melbourne, explains the implications:

“High debt‑to‑income ratios can be a sign of a bubble, but it can also indicate a willingness to pay higher prices for long‑term stability.” He warns that while some borrowers are stretching their budgets, others are being priced out of the market, leading to a shift towards rental markets in inner‑city suburbs.

The podcast references a recent National Housing Survey (also linked in the article) that shows a 10 % increase in rental vacancy rates in regional areas, suggesting that the price surge may be pushing renters into the suburbs.

5. Policy and Government Initiatives

The episode takes a deeper dive into government responses. Thompson brings up the First Home Loan Deposit Scheme and the Regional Housing Boost, both of which aim to ease the burden on buyers. However, experts point out that these schemes have not yet fully addressed the underlying supply issues.

A guest from the Australian Treasury, Lydia Kim, comments on the upcoming Housing Supply Strategy slated for release next month. She explains:

“We’re looking at easing some of the planning restrictions, speeding up approvals for medium‑density projects, and incentivizing developers to build in high‑density zones.”

Listeners are also made aware of a Housing Infrastructure Plan that proposes a $5 billion investment in new infrastructure projects across the country to support new housing developments.

6. Investor Sentiment and Market Forecasts

The podcast closes with a discussion on investor sentiment, citing a Reuters‑Bloomberg poll that found 68 % of real‑estate investors expect property values to continue rising in the next 12 months, provided interest rates remain stable.

“It’s a delicate balance,” says Thomas Greene, a real‑estate investment strategist. “If rates start to climb faster than expected, we could see a sharp correction. But if the RBA maintains a ‘wait‑and‑see’ approach, the market could stay on its upward trajectory.”

The final segment features a quick look at forecasts from S&P Global and Morningstar, both predicting a 4 % to 5 % rise in median prices for the remainder of the year, contingent on stable inflation.

7. Links for Further Reading

Throughout the episode, Thompson references and links to several key documents and reports:

1. Australian Bureau of Statistics – Housing Supply Shortfall – provides detailed figures on regional housing deficits.
2. AHURI – 2025 Housing Supply Report – outlines supply constraints and policy recommendations.
3. RBA Press Release – 2025 Inflation Forecast – contains official interest‑rate guidance.
4. National Housing Survey – 2025 – offers insights into affordability and rental trends.
5. Reuters‑Bloomberg Investor Sentiment Poll – 2025 – captures market outlook.

These links are integral to understanding the data that underpin the podcast’s arguments, giving listeners access to the raw numbers and context.

Bottom Line

The “Australia’s Property Market Is Heating Up Again” podcast offers a comprehensive overview of a complex, evolving landscape. While Australian home prices have begun to climb again, the episode makes it clear that the market is still fragile. Supply constraints, high borrowing costs, affordability challenges, and policy responses all intertwine to create a situation that could see continued growth, a correction, or a plateau depending on a handful of key variables.

For anyone interested in the pulse of Australian real estate—whether a first‑time buyer, seasoned investor, or policy maker—the episode provides a rich tapestry of data, expert insight, and actionable information. It underscores that while the market may appear to be “heating up” on the surface, the underlying currents are far from calm.