Insurance insights

10 insights into the investment property market

Each month we pull together 10 insights impacting the investment property market.

Rental supply stays critically constrained, as renters pay more per week

The national average vacancy rate for rentals fell to 1%, calculated as rent listings advertised for three or more weeks, divided by total rent stock. Data from March indicates Adelaide, Darwin, Hobart and Canberra had less than 1,000 vacant rentals, as strong tenant demand continues to absorb available rentals. Meanwhile, the national advertised rents are 5.9% higher than this time last year, with capital cities averaging nearly $800/week.

The latest figures from Cotality’s Rental Review indicate households are paying 33% of median income to rent, about $200 more per week than five years ago.

Home prices updates

Homeowners continue to sell from a position of financial strength. Capital city asking prices increased 8.4% compared to this time last year. Houses now average $1.5m (up 8%) and units $812,000 (up 11.2%). Nationally, asking prices for houses have increased to $1m (up 11.7%), and units to $651,000 (up 12.1%). Properties eligible for the 5% Deposit Scheme saw increases in asking price by 6.7%, compared to 3.6% for higher-priced homes, new analysis by Cotality shows.

Listings

Despite new listings briefly spiking in March, rolling data through early April shows new listings are down 3.3% nationally, compared to 12 months ago, and 6.1% down on the five year average. This indicates sellers remain reluctant to list despite strong price growth and tight supply conditions.

Regions wrap

With affordability tightening and further cash rate increases expected to be announced by the RBA in May, borrowers are looking to the regions. PRD’s report Smart Moves: Regional Edition highlights 10 regions that based on affordability, property market trends, new developments and employment data may offer strategic investment opportunities. Regional house resale profitability exceeds 95% in the most states, with QLD and NSW leading.

Generational movements

Millennials, Boomers and Gen Z will enter new life stages over the coming decade, and their movements may cause long-term rebalancing. The biggest generation, Millennials are shifting into peak family formation years, and looking for bigger homes. Boomers are leaving the workforce with more wealth than previous retirees, and Gen Z, who generally have higher levels of education and a preference for living close to employment hubs, may support strong demand for inner city rentals. Stay tuned to see how these shifts play out.

Construction sector warns of housing delays due to supply chain shocks from geopolitical tensions

Peak industry bodies in construction are calling for reduced red tape and streamlined regulations, to take pressure off builders, as the increasing fuel prices and supply change disruption drive costs up. An economic report commissioned by the Civil Contractors Federation outlines significant risks to business viability and project delivery across the sector. The NSW Government held industry roundtable talks to address increasing fuel-related pressures.

Changes in Capital Gains Tax (CGT) and Negative Gearing in the news

Following a Senate inquiry that found CGT and negative gearing have skewed housing towards investors, and framed as intergenerational fairness, the Federal Budget scheduled for 12 May is likely to include changes to CGT. An industry collective has released independent modelling that shows changes to negative gearing and CGT with minimal grandfathering may reduce investment, constrain supply and place upward pressure on rents.

Governments announce supply for First Home Buyers

The Fed Gov has come to agreements with Tas and ACT state Govs to unlock approximately 4,000 homes in Tas and 4,900 home in the ACT. Both include a portion of homes put aside for first home buyers. The WA Government’s 2026-27 budget has allocated $250m for more affordable apartment development.

Need to know

Rent Tech has been put on notice, as the Privacy Commissioner found that 2Apply, a rent tech platform, collected excessive personal information by unfair means, following a 12-month investigation. In Victoria, changes to rentals laws came into effect on 31 March, including a standard application form.

Snippets – Zipper lots in focus

Zipper lots, residential housing layouts that create a zip-esque pattern, are a medium density alternative to townhouses or apartments. The design allows for full-sized houses to fit on smaller blocks of land, as small as 250 sqm, by building close to the property line. This approach, in use in NSW, aims to increase housing supply without high-rise apartments. Given the interest in larger family homes, zipper lots may bring welcome relief.

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