10 insights into the investment property market

In recent news, rental affordability remains steady as rents stabilise; housing affordability improves despite prices rising; interest rates tipped to rise but investors surge ahead; and it’s a wrap – a look at the year that was and what lies ahead in 2026.

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

1. Rental affordability holds steady. The proportion of income required to meet the median rent remained stable at 24.3% in Q3, though trends were mixed across the jurisdictions – NSW remained the least affordable (27.2%), while the ACT was the most affordable (18.4%). Half of all renters experienced a rent rise in 2025 – up $62 per week, on average, on 2024 prices, and 42% had to cut back on essential spending to afford their rent. Essential workers like nurses, cleaners and hospitality workers can’t afford rent in major parts of the country, as research finds households will need six-figure incomes to rent a median priced house in 2026.

2. Rents stabilise as vacancies tick higher. National advertised rents were largely steady throug November, with combined rents unchanged for the month and up 5.3% YOY. The national residential vacancy rate rose 0.1% to 1.3% in November, with the total number of residential vacancies increasing to 38,690 dwellings. While capital city house rents remained steady, unit rents surged in November. The national median time on market was 16 days for apartments and 18 days for houses over the month.

3. Housing affordability on the up. In Q3, the proportion of median family income required to meet average loan repayments decreased for the third consecutive quarter to sit at 47.0%. Affordability improved 0.5% over the quarter and 1.6% over the year, with improvements in all states and territories except for Queensland. Despite the improvement, there are only 501 suburbs where buyers can purchase an average house for under $500,000, and just 12% of housing stock is now affordable for those with an average household income of $180,000.

4. House prices continue to rise. National home values rose 1.0% in November, with mid-sized capitals outperforming Sydney and Melbourne due to affordability constraints. The national median house price over the month was $1,270,561, while the median unit price was $710,871. The national median price for houses increased 3.1% over the September quarter, increasing in all capital cities, while other dwellings increased 2.5%, with increases in all capital cities except Canberra and Darwin. Prices rose 8.7% nationally over the year – adding around $77,900 to the value of the median home ($873,000) – to sit 51% higher than five years ago.

5. Listings dive while asking prices rise as spring selling season ends. Total national listings fell 5.4% MOM in November to 238,824, with new listings down 11.3%. Despite the seasonal downturn, one in four are considering selling their property over the next year. Nationally, asking prices rose 1.0% for houses and 1.6% for units over the month, with combined dwellings up 1.4% MOM and 11.4% YOY.

6. Investor activity surges. The year saw investor activity surge following the early-year rate cuts, with investor lending jumping more than 20% in two quarters, driving their share of new finance above 40%, the highest level in almost a decade (80% of loans were used to purchase established homes). Credit growth for housing investors rose to 6.6% in 2025, outpacing owner-occupier growth at 5.7%.

7. Market intel: Rising prices, duplexes, regional homes, and lifestyle amenities stirred investor interest in 2025. In the year ahead, units, townhouses, shared housing, multigenerational living, co-living, and granny flats are all tipped to be in investor sights. Investor hotspots for 2026 include Bathurst, Footscray, Wavell Heights, Applecross, Brooklyn Park, and Rapid Creek. Duncraig, Magill, Kelvin Grove, Dulwich Hill, and Kingsville are suburbs to watch for investment properties under $1.5M.

8. RBA holds – next move likely to be up. In December, the RBA decided to leave the cash rate at 3.6%, indicating further cuts were unlikely and the next move may be a lifting. Even with rates on hold, housing value growth in the more affordable segment of the market is set to continue rising. Banks have increased mortgage rates independent of the RBA, including one of the ‘big 4’ lifting twice in a month. Further rate cuts in 2026 aren’t widely expected, while one global bank and two big Oz banks forecast two rate rises in the first half of 2026. Meanwhile, 37% struggled to pay their mortgage in November and 19% think they’ve borrowed too much.

9. Snippets: WA extended its rent support programs, while Queensland reformed its foreign investor tax settings. Victorian landlords exit the market. Fed Government rolled out its Help to Buy program. Rent tech exposes almost half of Victorian renters to unnecessary data risks and expenses. Living by the water commands an 86% premium. Cloud Dancer is Pantone’s 2026 Colour of the Year. STRA market moves further away from original sharing economy model. “COMO” trend heats up as house prices rise 8.7%. Buyers eye features that boost happiness, while lifestyle features motivate young buyers. Swiss bank UBS said a global housing bubble was unlikely despite overheated markets.

10. It’s a wrap! Check out the end-of-year wraps from Cotality, Domain, and McGrath. And the 2026 forecasts from Ray White, API, My Housing Market, Property Update, SQM Research, Domain, Westpac, realestate.com.au, and  LJ Hooker and Oliver Hume.