Australian mortgage brokers face a challenging but opportunity-rich landscape in 2025, with housing supply falling short of ambitious government targets, prices continuing to climb, and brokers taking a central role in guiding clients through complex market conditions.
Housing Supply Crisis
Australia’s National Housing Accord aims for 1.2 million new homes in five years, meaning 240,000 per year—far above historical peaks. Forecasts now expect only 938,000 completions, resulting in a shortfall of roughly 262,000 homes. Developers are struggling due to surging construction and land costs, with fewer new projects stacking up financially, particularly in the apartment sector. In 2025, only 52,500 new apartments are expected, down by 11,500 from last year. With a growing population and rental vacancy rates at historic lows, supply struggles push prices higher, squeezing affordability for buyers and renters alike.
Soaring Prices Impact First Home Buyers
Home values are rising fastest at the lower end of the market, putting first home buyers under increasing pressure. In 2025, the median Australian house price is $920,003, and capital city averages are above $1 million. With deposit requirements stretching to eight years’ savings and the typical loan now consuming over half of disposable income, affordability is at a multi-decade low. Sydney, Melbourne, Brisbane, and Perth are all forecast to see significant further rises by 2026, making entry into the housing market more difficult despite expanded government schemes.
Economic ‘Lipstick on a Pig’ and Lending Market Trends
Australia’s economy has grown 4.6% since mid-2022, avoiding recession but with sluggish momentum. GDP rose just 1.3% over 2024-25, the weakest since the early 1990s outside pandemic conditions. Inflation is easing, and modest interest rate cuts are expected to support growth and dwelling investment later this year. However, rising costs of living and flat productivity mean the recovery is less buoyant than headline figures might suggest.
Mortgage Brokering: Opportunities & Shifts
- Mortgage brokers now arrange 75% of residential loans, a record high, reflecting the sector’s deepening trust and value to borrowers and lenders.
- Increasing competition, greater focus on client retention, and the adoption of technology (including AI for smarter, more personal broking) are shaping the market.
- Brokers are set to surpass their record share in 2025, with Australians seeking trusted advice amid complex choices.
Rise of Private Lending
Private lending is surging, driven by borrowers seeking flexible funding and investors craving diversification. Brokers play a pivotal role as banks tighten criteria, connecting borrowers to tailored solutions outside traditional markets. Growth in private credit is outpacing general business lending, but brokers must be vigilant—private deals often involve increased complexity and lighter regulatory oversight, making due diligence and compliance critical and Oasis Mortgage Group is leading the way with more than 30 years experience.
Australian mortgage brokers are increasingly vital in helping clients navigate affordability hurdles, evolving lending options, and regulatory complexity, with the sector positioned for further growth and strategic importance in 2025.
