Welcome back.
As we move into December, the market has sent us a clear signal: momentum is shifting to assets that offer an immediate financial buffer against high holding costs. The data confirms a two-speed market where Sydney and Melbourne are being held back by their own high prices, while the mid-sized capitals continue to accelerate, largely driven by chronic under-supply.
If you’re a new investor, this fragmentation is your chance to stop chasing headlines and start chasing hard data. Forget the fear of high rates; the structural shortage of housing and relentless population growth are the bedrock supporting property values and fuelling rental income.
Let’s cut through the noise and look at what actually matters for your next decision.
Market Snapshot (Data to End of November 2025)
- National Price Growth Easing: CoreLogic reported a 1.0% rise in national dwelling values for November, moderating slightly from the 1.1% gain in October. The national market is strong, but the blistering pace is easing.
- The Perth Power Play: Perth remains the clear national leader, surging 2.4% for the month. This exceptional result is underpinned by listings running 40% below the five-year average—a supply crisis in full effect.
- Big Cities Lagging: Sydney (+0.5%) and Melbourne (+0.3%) are significantly lagging, as affordability constraints and high dwelling-to-income ratios place a firm ceiling on near-term growth.
- Rental Crisis Confirmed: SQM Research (October data) holds the national vacancy rate steady at a critical 1.2%. Hobart (0.4%), Adelaide (0.8%), and Brisbane (1.0%) are in a severe landlord’s market, guaranteeing income security.
- Inflation and Rates: ABS data confirms annual inflation climbed to 3.8% in October (trimmed mean at 3.3%), cementing the RBA’s decision to keep the cash rate on hold (3.60%). No rate cuts are expected in 2025.
This Week’s Data Trends
Prices, Rents, & Yields
The CoreLogic analysis highlights that the fastest growing segment is the affordable tier.
- The Lower Quartile Advantage: Across the combined capitals, the lower-quartile of the market saw stronger quarterly value growth than the upper quartile. This is the simple economic reality of a high-rate environment: buyers compete fiercely for what they can service.
- Yields as a Buffer: In the capital cities leading on price growth (Perth, Brisbane, Adelaide), rental yield strength remains a core feature. This high yield is crucial; it’s the immediate cash-flow buffer that allows you to ride out a period of high interest rates without stress.
Vacancy Rates & Listings
The rental market is your primary indicator for future price growth and immediate cash flow stability.
- Scarcity Funnel: The incredibly tight vacancy rates in the smaller capitals are acting as a funnel. High demand from record migration combined with no new supply means rents must rise, which in turn underpins capital values for investors.
- Listings Deficit: The market imbalance is clearest in the lack of stock. With capital city listings generally 16%below average, every property listed becomes a battleground, giving sellers significant pricing power.
Economic Signals
The unexpected stickiness of inflation at 3.8% has essentially killed any hope of a Christmas rate cut.
- Rate Stability is Key: The RBA’s commitment to holding the rate steady at 3.60% until inflation returns to the 2−3% target provides predictability. For investors, this stability is valuable—you can budget with certainty, knowing your holding costs are fixed for the foreseeable future.
- Investor Lending: ABS data for the September quarter showed that investors were responsible for building 43% of new homes. This confirms the vital role you play in the housing supply chain, and your ability to gain access to credit remains strong, especially for supply-adding purposes.
Timeless Property Principles: What the Data Confirms
This week’s movement is a real-world demonstration of fundamental wealth-building principles that separate the rich from the busy.
- Principle of Finding Your Blue Ocean (Not the Rat Race): The fact that Sydney and Melbourne are lagging is a lesson in the power of seeking a niche. Successful investors don’t chase the most expensive, highly-publicised markets (“The Rat Race”). They go where their capital works the hardest—in affordable, undersupplied markets like Perth and Brisbane, where high yields and low entry prices compound faster.
- Principle of Using Good Debt (Leverage): The fear of high rates causes many to freeze. However, the disciplined investor understands that high-interest good debt (used to acquire an appreciating, income-producing asset) is superior to no debt at all. Your focus must be on serviceability and ensuring the property’s rent covers your costs—a lesson that is easier to execute in high-yield cities right now.
- Principle of Structural Scarcity: The chronic undersupply—with new construction failing to keep up with migration—is the non-negotiable scarcity factor that guarantees long-term growth. When you buy quality residential property today, you are acquiring an asset that the government and the economy are structurally unable to reproduce quickly enough. This is the ultimate hedge against market volatility.
What This Means for New Investors
Forget waiting for a crash or a cut. The market is giving you a clear instruction: look for income security outside the two biggest cities.
Simple, Tactical Guidance
- Prioritise Yield to Manage Risk: Your first investment must be cash-flow positive or neutral after all costs (P&I, maintenance, rates). The low vacancy rates in Perth, Adelaide, and Brisbane are giving you this gift—use it.
- Focus on Established Assets: Avoid the construction risks, delays, and cost blowouts plaguing the building sector. Buy established properties with verified rental histories and minimal maintenance requirements.
- Find the Affordability Sweet Spot: Target suburbs in the strong capitals (Perth/Brisbane/Adelaide) that are priced at or just below the median. This is where demand is being squeezed hardest by first home buyers and investors.
Risks to Watch
- The Valuation Gap: In hot markets like Perth, valuations can lag sale prices. Ensure your finance is robust enough to cover a potential valuation shortfall, or your deal might collapse.
- Inflationary Costs: While rents are strong, maintenance costs are also rising due to inflation (3.8% CPI). Always budget a higher contingency for repairs and property management fees.
Opportunities Worth Investigating
- Brisbane Townhouses/Units: With a 1.0% vacancy rate, established, low-density units (especially post-war or 1990s brick units with a strong land component) offer a perfect blend of high yield and emerging capital growth driven by affordability.
- Adelaide’s Outer Rings: The Adelaide market is highly affordable and incredibly tight (0.8% vacancy). Look for quality houses in the outer-ring suburbs (20-30km from CBD) which offer the lowest entry price for a high-demand asset.
Top Markets Showing Momentum (with reasons)
| Market / Segment | Reason for Momentum | Investor Target |
| Perth (Overall) | Lowest listings volume on record (−40% below average) driving +2.4% monthly growth. | Houses and land-rich assets in middle-ring suburbs (10-20km). |
| Brisbane (Affordable Tier) | High migration + low vacancy (1.0%). Growth is spreading out from the core to suburbs that offer relative value. | Established townhouses and low-rise units with a strong rental track record. |
| Hobart/Adelaide (Rents & Yields) | Lowest vacancy rates in the country (0.4% and 0.8%), providing maximum cash-flow stability despite more modest capital growth. | Small houses or quality units with verified high rental demand. |
Investor Action Steps for the Next 14 Days
- Review Suburb Stats: Use CoreLogic or openstats to compare the vacancy rates and median price movements for your top three target suburbs in Brisbane or Perth. Find the one with the lowest stock on market.
- Verify Serviceability: Re-check your borrowing capacity based on the latest interest rate holds. Ensure you can comfortably handle the 3.60% cash rate plus the bank’s buffer.
- Engage with Local Agents: Start calling agents in your target area specifically asking about off-market stock for investors. In a tight listings market, this is where the best deals are often found.
The market has a strong foundation, and the current stability in interest rates gives you a clear window to act before the next wave of demand hits.
Don’t wait for things to be perfect; act decisively on the clear evidence of scarcity and yield.