Australia’s market trends for 2025 are poised for some significant shifts, influenced by changing consumer behaviors, the evolution of the hospitality industry, and the property market dynamics. Recent insights reveal how Australians, facing inflation and economic uncertainties, are becoming more intentional with their spending, especially when it involves dining and entertainment.
One notable trend is the increasing frequency of on-premise visits. According to recent data, average monthly visits to hospitality venues surged from 5.3 times in October 2023 to 7.2 times by September 2024, reflecting a heightened desire for quality experiences rather than spontaneous outings. Interestingly, the focus on enjoyment during less frequent visits appears to rise. With promotions playing a major role, many patrons seek value for their money, where quality becomes the cornerstone of repeat visits. The research indicates factors like getting a good deal (44%), feeling the worth of the cost (40%), and experiencing high quality (36%) largely shape consumer perceptions of value.
The appeal of experience-led visits continues to dominate, with events slowly overtaking food-led occasions. Increased social gatherings, including special events now account for 39% of total visits, up by 4 percentage points year-on-year, indicating Australians are looking for reasons to celebrate or just enjoy time out. Food remains central to the on-premise experience, evidenced by half of consumers visiting venues primarily for food-based occasions, compared to 36% solely for drinks.
Among the intriguing developments is the growing popularity of ready-to-drink (RTD) beverages among all age groups—once largely favored by younger consumers, RTDs now see support from 55% of drinkers across demographics. The research shows consumption among older patrons has jumped by 9 percentage points since March 2024, pointing to the need for the industry to adapt to this trend and diversify their offerings to engage this wider audience.
Meanwhile, Australia’s hospitality sector faces what many predict to be a franchising boom. The pandemic reshaped industry operations, encouraging property owners to look for stability and support through franchising models rather than traditional independencies. Notably, Accor has highlighted distinct growth especially among regional hotels, laying claim to over 122 franchised hotels already.
Expert insights from Adrian Williams at Accor suggest the impact of the shift reflects business adaptability to change. Investors are beginning to recognize the strength of franchise agreements, moving away from the desire for independence to embracing collaborative models where brand equity can drive success.
Franchising offers hotel owners more operational flexibility through shorter operating agreements, moderated by white-label operators, thereby providing paths to profitability without the heavy burdens of complete ownership. Though some hotel owners grapple with anxiety over losing autonomy, the acknowledgment of franchising’s benefits appears to be growing, perhaps on the backdrop of industry evolution accelerated by the pandemic.
Turning to the property market, the outlook for 2025 also generates discussion among experts. The Reserve Bank of Australia (RBA) continues to navigate economic uncertainties linked to inflation and global economic dynamics, with the potential for interest rate adjustments hovering just out of reach—at least, until the second half of next year, according to key analysts.
Nerida Conisbee, Chief Economist at Ray White, pointed out macroeconomic risks tied to potential inflationary pressures stemming from shifts within international markets, especially the United States. Despite comparatively stable inflation as of late, the unpredictable nature of global events poses questions about the RBA’s future actions. Observing the monetary policies could reveal the urgency for potential rate cuts should economic strains increase.
Predictions suggest the second half of 2025 may finally bring some relief for mortgage holders. John McGrath, founder of McGrath Estate Agents, warns against expecting any immediate reprieve. He elaborates how high interest rates contribute to the mortgage stress many face, particularly first home buyers, leading to what he terms a “tale of two cities.” Some markets thrive where demand persists, but others stagnate under the weight of affordability issues.
Despite these challenges, certain areas, particularly regional urban centers and cities like Adelaide and Brisbane, exhibit strong buyer demand dynamics. Terry Ryder, at Hotspotting, emphasizes localized buyer interest based on economic parameters, largely serendipitous to infrastructure and availability.
On the listing side, experts predict increased availability and diversity of offerings as the market stabilizes. Current trends show rising listings, especially across metropolitan areas, even as supply starts catching up to demand. A figure from SQM Research indicates improved listings across Perth, Adelaide, and Brisbane compared to historical normals; only Darwin has witnessed recent declines.
Expected stabilization points toward the normalization of listings post-first quarter 2025, which could help ease pressure on potential first-time buyers and investors. Those currently under pressure because of prevailing high-interest rates may find new opportunities as the market begins recalibrations.
By 2025, certain markets appear poised for price growth, particularly markets like Darwin, which displays renewed economic vigor and strong rental yields. Melbourne appears comparatively undervalued against its peers, hinting at potential growth as investors revisit the capital. While Ballarat, impacted by tax policies, may be on the upswing again as demand is expected to increase amid stabilizing conditions.
Overall, as the market gears up for 2025, the essence of consumer choice—whether it be dining out, choosing experiences, or participating actively within the property sector—continues to evolve. Recognizing how each of these trends interlock will shape not only industry strategies but also consumer behaviors as Australians adapt to changing economic climes.
