10 insights into the investment property market

In recent news, rents on the rise as vacancies tighten; annual rental growth rate hits a four-year low; despite this, rents predicted to rise another 18%; home prices up almost 50% in five years; Adelaide joins the million-dollar club; listings up as asking prices rise; building numbers dwindle; investors return as industry warns about reforms; RBA holds and opts for wait and see approach; and the latest property trends revealed.

Each month we pull together 10 insights impacting the investment property market. Read on for this month’s instalment…

1. Rents re-accelerate. National rental prices picked up pace in the first quarter of 2025, reversing the slowing trend observed late last year. According to PropTrack data, the median weekly advertised rent across Australia increased by 1.6% over the March 2025 quarter to reach $630 per week – representing a 5% increase compared to the same time last year and adding an extra $1,560 annually to renters’ housing costs. Capital city rents rose 1.6% to $650 p/w, while regional rents remained steady at $550 p/w. PropTrack also identified the capital city suburbs where rents have fallen or remained static in the past year, and the suburbs where it is cheaper to buy than rent.

2. Annual rental growth hits four-year low. National rents rose 1.7% over the March 2025 quarter, according to CoreLogic’s Quarterly Rental Review. However, the uptick was largely seasonal, with the rise in rents over the three months to March marking the slowest Q1 growth since 2019 (1.0%). Also for the first time since 2019, combined capital city house rents remained unchanged for three consecutive quarters, with annual growth easing to a four-year low, according to Domain’s Rent Report for the March 2025 quarter. While unit rents across the combined capitals re-accelerated, the pace of growth moderated, recording the slowest March quarter increase in four years.

3. Rents rise at rates not seen since the GFC. Rents have surged by 14.2% over the past two years – more than double the overall inflation rate of 6.6% – according to analysis by Money.com.au. The 14.2% figure reflects the compounding effect of consecutive annual increases: a 7.3% rise in 2023, followed by a further 6.4% increase in 2024. The last comparable period of rental growth occurred during 2007-08, at the height of the global financial crisis, when rent growth peaked at 8.4%. Based on current trends, projections show rents could rise another 18% by 2030.

4. Home values up almost 50% in five years as affordability hits record low. CoreLogic’s April Housing Chart Pack revealed national housing values surged 39.1% over the past five years, adding approximately $230,000 to the median dwelling value. According to PropTrack’s Home Price Index, national property values rose 0.27% in March, pushing prices 3.91% higher than a year ago and up 48% over the past five years. The national median dwelling value was $799,000, with the median capital city value sitting at $865,000 and the regional value at $663,000. CoreLogic’s Property Pulse report revealed housing affordability indicators across Australia remained at or reached new record highs in unaffordability at the end of 2024, with a household with a median income needing to spend a minimum of six times their annual gross income to purchase a median priced dwelling.

5. Adelaide joins the million-dollar club. Adelaide joined Sydney, Melbourne, Brisbane and Canberra as a capital city in which the median house price topped $1 million, with Perth on track to reach the milestone by the end of 2025, according to Domain’s House Price Report.

6. Selling. Nationally, house asking prices increased by 0.8%, while unit prices increased by 0.7%, resulting in a combined increase of 0.8% in March. Also according to SQM Research, total nationwide residential property listings increased by 0.9% over the month of March to reach 251,605 listed properties.

7. Building buzz. Figures from the ABS showed the total number of dwellings approved fell 0.3% to 16,606 in February, following a 6.9% rise in January. Additional ABS data showed the number of building commencements fell 4.4% in the December 2024 quarter. The HIA stated there were 168,050 new homes that commenced construction in 2024, which was the lowest level in over a decade.

8. Investors return. Investor loans surged 22% nationally over the past year, far outpacing owner-occupier growth (6%), according to Money.com.au’s Mortgage Insights report. Projections suggest more than 234,000 investor loans could be issued in 2025.

9. RBA holds as Trump’s tariffs cause uncertainty. At its Board meeting on 1 April, the RBA decided to leave the cash rate on hold at 4.10%. While some financial markets predict a rate cut in May, the RBA has cited concerns around global economic uncertainty and the prospects of a global trade war erupting which will weigh on the May rate decision. API reported on some of the implications of the tariffs, while Property Update explored how the tariffs may be a boon for Australian property.

10. Property need-to-now. More higher-income households are renting. A third of people put their pets first when finding a new home. Younger generations are more likely to sell privately and embrace co-ownership and apartment living. Areas with high LGBTQ+ populations are seeing above-average property price appreciation. For every 10 decibel increase in aircraft noise, the value of a property can decrease by up to 9%. Ferry and rail services increase surrounding property values. New homes are a more affordable housing option in five Australian states. Energy efficiency has become more important than a large backyard. Renovations may not add as much value as thought. Prestige Australian waterfront residences are among the world’s most valuable and sought-after properties.

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.