QMI: March 2025

I am happy to present our second Quarterly Market Insights (QMI) for the year.With a federal election just completed, Donald Trump’s second presidency is commencing, and there are a host of economic challenges, it is safe to say it has been a frantic start to 2025.

Despite the political distractions here and overseas, our clear message from the first quarter, and the evidence provided by our research, is that the outlook for land markets around the country has improved over the last three months.Our improved outlook is based on the continued strengthening of demand across all the markets we monitor, coupled with expectations of more interest rate cuts.

The economic fundamentals of major markets remain positive, with population growth easing but still tracking well above historical average levels, and the unemployment rate remained steady over the first quarter of 2025. On the supply side, both dwelling completions and the more up-to-date building approval numbers show we continue to build significantly less than is needed to house our growing population.

Our expectations for interest rates have changed over the last three months. While the RBA delivered the widely expected first rate cut in the easing cycle in late February, the expectation was that there would only be another couple of cuts throughout 2025.

President Trump’s tariffs announced in early April, and the related uncertainty have fundamentally changed that expectation, with Oliver Hume and most analysts now forecasting up to five 25bp cuts before the end of the year.While we didn’t see significant changes in trends in land markets in the first quarter, enquiry levels and sales volumes began to improve as we approached March. We continue to believe that we have passed the bottom of the land sales cycle and that will see growth in land sales and prices in 2025 in most markets around the country.