Is real estate investing still relevant in Australia in 2025, or are there better ways to make money long term?
Navigating the investment landscape in Australia in 2025 requires a careful consideration of various asset classes, and the question of whether real estate still holds its ground is a valid one. The debate between real estate and other asset classes is as strong as ever. While some may argue that the days of easy property gains are over, the fundamentals of the Australian real estate market still hold true. For those with a long-term vision, real estate continues to be a cornerstone of wealth creation, offering a level of stability and control that other options simply can't match.
The Alternative Investment Landscape
Modern society's increasing trend toward short-term thinking, fueled by the relentless cycle of social media and the rapid pace of technology, poses a significant challenge to traditional financial planning. Social media feeds with viral content and influencers who promote quick financial gains condition users to pursue immediate rewards. The environment generates a fear of missing out which makes people view the patient approach of real estate investments as dull compared to the potential for fast wealth creation.
Alternative investments have gained popularity recently. For example, the huge increases achieved through cryptocurrencies which strengthen the tendency for short-term thinking. The results are understandably appealing. For those who invested early and were able to hold their investment patiently through a rollercoaster return, they have seen their investment perform incredibly well. These rapid price increases in short periods of time seem to have diverted attention from the established long-term growth potential of property investments. Real estate investing demands a disciplined patience which appears to have been lost in recent years. The cultural trend now favours short-term trends over long-term financial goals which makes it harder for people to maintain their commitment to sound long-term investment plans.
With these sorts of investments currently in favour, is there still room for property investment in Australia in 2025?
There is no doubt that Australian residential real estate market offers both challenges and opportunities. The real strength of Australia’s real estate market as an investment opportunity is two-fold.
Firstly, the allure for Australians to own their own home remains strong. Despite continual price increases, we keep seeing people prioritising home purchases, often giving up other comforts to save that bit extra to put towards a purchase. This mentality, coupled with a persistent housing supply shortage keeps pressure on the market and will continue to create opportunities for investors who purchase properties strategically.
While there will unfortunately still be those who struggle with cost of living pressures, with inflation now back within the target range and interest rates having eased, we expect that many Australians will find themselves in a position where they financially comfortable again and able to save toward home ownership. This is likely to continue over the remainder of 2025, with a healthy labour market and consumer sentiment stability.
Additionally, the ability to use leverage to increase borrowing capacity remains as one of our real estate markets strongest yet often overlooked advantages. Controlling a large investment with a small downpayment means that even modest price increases in the real estate market can provide significant returns for investors. Obviously this works both ways, and downturns are also compounded, however the traditional stability within the market is likely to continue off the back of our first point.
We believe that these two factors combined still make Australian Real Estate a relevant and compelling investment vehicle for strategic investors, with those willing to take a patient and long term approach to their financial future likely to prevail. It is likely the in this time of short term thinking and get rich quick mentality, we will see that the Warren Buffet quote “"It's only when the tide goes out that you discover who's been swimming naked" will hold true.
