Why the next three years could be the best time to invest in property
Stable rates, tight supply and improving confidence are creating a rare three-year window for strategic property investment.
4 min
After the RBA failed to cut interest rates earlier this month, many Australians are still sitting on the sidelines, waiting for “the right time” to buy.
But as every experienced investor knows, there’s rarely a perfect moment. Only windows where fundamentals align.
The next three years look to be one of those windows. This period represents a great opportunity to step into the market strategically, supported by strong long-term tailwinds and a more stable lending environment.
Supply is tight and that’s not changing anytime soon
Australia’s housing shortage has become structural.
The government’s target of 1.2 million new homes by 2029 is already slipping out of reach, with completions tracking closer to 160,000 per year.
Construction costs, planning bottlenecks, and labour shortages continue to restrict new supply, while population growth and immigration remain high.
Australian market snapshot
Perth (WA)
4,251 listings (week ending 1 Jun 2025)
2,832 listings (Oct 2025) ↓ 40 % YoY; sales ↓ 3.1 %; median days on market ≈ 12
Significant supply contraction
Despite small weekly lifts, total stock remains 40 % below 2024. Homes under the median are selling within days.
Brisbane (QLD)
Median value $945 k; monthly growth 1.5 %
Median value $992,864 (+1.8 % MoM, +10.8 % YoY); unit listings 45 % below 5-yr avg
Tight supply + rising prices
Affordable pockets < $1 m remain highly competitive. Demand concentrated around family suburbs.
Melbourne (VIC)
Listings below 5-yr avg; mild buyer hesitancy
Supply still below 5-yr avg; tight in inner east, north & inner west
Selective undersupply
Now Australia’s most affordable capital on income-to-debt ratio. Tight supply in established suburbs positions it for rebound.
Across Perth, Brisbane and Melbourne, in particular, demand continues to outstrip supply, a formula for steady, sustainable growth rather than speculation.
In Perth, listings have fallen roughly 40% year-on-year, and properties are turning over in just 12 days on average, the fastest market in the country.
For Brisbane, supply remains well below normal, particularly under $1 million, where investors and first-home buyers overlap.
And in Melbourne, affordability is now the best in the country, with tight supply in key inner corridors setting up for a cyclical recovery as rates stabilise.
Confidence is returning
After two years of turbulence, the rate environment has finally steadied. Most lenders now sit between 5.3% and 5.6%, roughly 1% lower than a year ago.
On an average $800,000 loan, that’s about $8,000 in annual savings, a meaningful improvement to serviceability and household cash flow.
While no one expects large cuts in the short term, the broader shift will breed confidence.
Borrowers who were cautious in 2023–24 are re-entering the market with renewed clarity around repayments and borrowing power.
This is an ideal time to re-engage clients who paused during the rate-rise cycle. With the right structuring, many can now step forward without over-stretching.
Demand, supply & location
In a market where many investors fixate on short-term yields, it’s critical to bring clients back to fundamentals.
The best opportunities over the next three years will be in locations with strong demand drivers, limited supply, and genuine affordability.
Strong demand drivers
Focus on markets backed by tangible fundamentals, infrastructure investment, job growth, and migration inflows. Areas with improving economies and active employment hubs consistently attract owner-occupiers, which supports long-term value.
Limited incoming supply + affordability
When affordability and low supply align, upward price pressure follows. Australia is currently building only around 160,000 new dwellings per year, well below the 240,000 needed to meet national targets. Markets with low construction pipelines and accessible entry prices are positioned for sustained growth.
Location and value-creation potential
Established, owner-occupied suburbs tend to outperform because they’re insulated from large-scale supply shocks.
Look for houses or properties with strong land content, ideally a 50 % or higher land-to-asset ratio and those that allow for renovations, granny-flat additions, or subdivisions over time.
While every market will move through its own cycle, the next three years should continue to deliver solid opportunities across Australia, particularly in locations where supply is tight, economies are strong, and demand is anchored by real fundamentals.
The market is resetting its risk profile
Macquarie Bank’s recent decision to halt lending to new property purchases in trust structures could also change parts of the investor market.
While it may slow activity in investment-heavy markets, it’s unlikely to affect demand in locations where most of the activity is driven by home buyers.
These areas are largely found within the major capital cities, and even in some of the smaller capitals with growing owner-occupier bases.
When assessing these markets, it’s important to look at the local economy, the industries that support employment, infrastructure investment, and migration.
Even indicators like Gross State Product (GSP) can provide valuable insight into the health of the local market and its resilience to policy changes.
This shift reinforces the importance of sticking to fundamentals such as strong economies, real demand, and sustainable affordability, not investor-driven locations.
Thinking long-term
The next three years won’t be about chasing quick gains.
They’ll be about steady, compounding growth driven by constrained supply, stable rates, and solid demand. Property wealth isn’t about speculation, it’s about structure, patience, and the discipline of buying the right asset and holding it through cycles.
If you’re considering entering the market, now is the time to act. Stable rates, limited supply, and improving affordability create a strong foundation for the next property cycle.
Abdullah Nouh is the Founder and Director of Mecca Property Group, one of Australia’s leading buyers’ agencies specialising in high-growth residential and commercial investments.
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2 min
The typically busy spring season for the housing market was a dud, and the summer isn’t looking much brighter.
Housing services companies like Zillow Group and Rocket RKT +3.78% were loud and clear last week on earnings calls: Rocket CEO Varun Krishna called the quarter through June “one of the toughest spring housing markets in years.”
Jeremy Hofmann, Zillow’s chief financial officer, said on a conference call that the company predicted earlier this year that the market for mortgages would be flat. “We actually now think it’s going to be down low-to-mid-single digits,” he said.
The rest of 2026 will remain challenging for mortgage origination volume, says KBW analyst Bose George. The question now is what happens in 2027. “If mortgage rates remain [around] 6.75%, I think that’s going to be challenging even for next year,” he says.
But what’s bad news for mortgage companies could be a positive for bargain hunters. Buyers can expect prices to grow more slowly—or mildly decline—with less competition as long as mortgage rates remain unpredictable.
Mortgage rates at the beginning of the year were solidly below year-ago levels, notes Zillow senior economist Kara Ng. But they surpassed last year’s levels recently, she adds, referencing Freddie Mac’s weekly survey of 30-year fixed mortgage rates. Last week’s reading, at 6.69%, was higher than year-ago levels for the first time in 2026.
“From the affordability point of view, it’s going to get more challenging in the second half of the year,” she says. “And when affordability gets more challenging, that impacts sales and home price appreciation.”
Mortgage application data tracked by the Mortgage Bankers Association has cooled since the beginning of the year. The trade group expects that the number of mortgage originations in the remaining two quarters will lag behind last year’s levels, after exceeding 2025 levels in the first half.
Rocket’s early-stage data—which the company told Barron’s it derives from its brokerage Redfin, demand for its mortgage products, and signs in its servicing portfolio that a homeowner is preparing to refinance or move—“leads us to expect the third quarter mortgage market to be smaller than the second,” Chief Financial Officer Brian Brown, said on the company’s call. He added that such an occurrence is “something the industry has not seen since 2022.”
Prices will be about flat nationally, Ng says. Zillow’s most recent forecast, which shows how values are expected to change in the year ending June 2027, show them dropping in roughly half of the 100 largest U.S. metros for which data is available.
Buyers aren’t rushing in at a time when mortgage costs are rising and unpredictable. But those with the right combination of patience and cash could stand to benefit. “If you are financially qualified to buy a starter home, you are facing less competition and you’re more likely to get a price cut,” Ng says.
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