Market Update — Monday, 15 December 2025

Headline summary

As Australia moves into the final weeks of 2025, housing market conditions are shifting from spring momentum toward a more seasonal end‑of‑year pattern. Price growth is moderating rather than reversing, listings are tightening ahead of Christmas, and rental conditions remain firm. For investors, this period is less about short‑term movement and more about positioning for early‑2026 opportunities.

National overview (prices and auctions)

CoreLogic’s latest data indicates that national dwelling values continued to edge higher through November, extending the gains recorded during spring. However, the pace of growth is now easing as buyer urgency softens and many sellers defer decisions until the new year. This moderation is typical for December, when transaction volumes historically decline and pricing becomes less reactive to short‑term sentiment.

Auction activity has also begun to taper. Clearance rates across major capitals have drifted lower compared with October highs, reflecting fewer listings and more selective bidding. Importantly, this softening is not signalling a downturn; rather, it reflects the normal slowdown associated with school holidays, year‑end leave and reduced campaign activity. Markets with structural undersupply are continuing to hold value, even as overall turnover slows.

Rentals (vacancy, rents and yields)

Rental conditions remain a key pillar of market support as the year closes. SQM Research data continues to show vacancy rates sitting well below long‑term averages nationally, with many suburban markets experiencing little seasonal relief. While rental inspections tend to slow in late December, demand typically rebounds sharply from mid‑January as households relocate for work, education and lifestyle reasons.

Advertised rents remain elevated compared with a year ago, supporting gross yields for investors who purchased earlier in the cycle. In markets where vacancy remains tight, landlords are retaining pricing power, though rental growth is becoming more incremental rather than aggressive. Investors should be mindful that rental conditions vary significantly by suburb and property type, particularly between family homes and inner‑city apartments.

Lending and investor activity

Investor participation has remained elevated into the final quarter of the year. ABS lending indicators show investors accounting for a large share of new housing finance, reflecting confidence in medium‑term fundamentals rather than short‑term price movements. However, many investors are now shifting focus from acquisition to preparation — organising finance, assessing opportunities and refining strategy ahead of 2026.

Owner‑occupier demand remains present but more cautious, with households factoring in cost‑of‑living pressures and borrowing constraints. This has created a more balanced competitive environment in some markets, where investors with pre‑approval and clear criteria are better positioned to act decisively when suitable stock emerges.

Risks & watch‑items

• Low listings environment: Reduced stock over Christmas can inflate competition for quality properties.
• Settlement timing risk: Transactions over the holiday period require careful coordination of finance and legal processes.
• Rental re‑leasing timing: Properties falling vacant in late December may face short gaps before January demand returns.
• Market complacency: Assuming uniform growth across all suburbs in 2026 may lead to poor asset selection.

Firm Foundations Property perspective

December is not typically a month for chasing market momentum — it is a month for preparation. The data suggests the market is consolidating rather than weakening, with fundamentals such as low vacancy and constrained supply continuing to underpin values. Investors who use this period to finalise finance, revisit suburb‑level research and clarify risk tolerance are often best positioned when activity resumes in the new year.

Rather than focusing on headline growth rates, investors should be assessing long‑term demand drivers: employment hubs, infrastructure, population flows and rental resilience. Markets that appear “quiet” in December often present opportunities for disciplined buyers who understand seasonal dynamics and act with confidence when others pause.

Conclusion

As 2025 draws to a close, Australia’s housing market is settling into a familiar end‑of‑year rhythm. Price growth is steady, listings are tight and rental demand remains supportive. For investors, the coming weeks are less about action and more about positioning — laying the groundwork for informed, strategic decisions in early 2026.