The December Pivot & Your January 2026 Playbook

Welcome to our second-to-last market wrap of 2025.

While most of the country has checked out to focus on the BBQ and the beach, the first 15 days of December have delivered a series of data “gut-punches” that change the playbook for the year ahead. If you’re waiting for “certainty” or big rate cuts to start your journey, you’re missing the most important shift we’ve seen all year.

The market isn’t just slowing down—it is re-segmenting. What worked in January 2025 (chasing any house in a growth corridor) will not work in January 2026. The winners next year will be those who understand the “Gap Play.”

Here is your three-part briefing to ensure you hit the ground running while everyone else is still in a holiday haze.

Part 1: The December Data Reality Check

The data dump from the first half of December (CoreLogic, SQM, and ABS) has confirmed a “two-speed” reality that is now set in stone for the new year.

The RBA’s “Hawkish” Hold: On December 9, the RBA held the cash rate at $3.60\%$. However, with October inflation coming in hot at 3.8%, the conversation has shifted from “When is the cut?” to “Is there a hike in February?” My Take: Stop betting on rate cuts to save your serviceability. Smart investors are now stress-testing their portfolios against a 4.0% cash rate.
The Rental “Unit Pivot”: National vacancy rates are hovering at a critical 1.3%. But look at the rents: unit rents surged 1.6% in the last month alone, while house rents have largely flatlined. Tenants have hit an affordability ceiling in houses and are flooding into the unit market.
The Supply Floor: ABS data confirms total dwelling approvals fell 6.4% in the latest count. We are still hundreds of thousands of homes short. This creates a “permanent floor” under prices—scarcity is your ultimate protection against market volatility.
Capital City Divergence: The “Engines” (Perth +2.4%, Adelaide +1.9%, Brisbane +1.7% are still in a boom, while the “Anchors” (Sydney +0.5%, Melbourne +0.3% are grinding to a halt under the weight of record-high prices. Having said that, there are markets within markets which might work out for your circumstances so don’t rule out the possibilities…

Part 2: The “Gap Play” – Suburban Case Studies

The most impactful idea for 2026 is the Value Gap. When house prices in a suburb decouple from what a normal family can afford, the demand shifts aggressively to high-quality units and townhouses. Here is how that looks on the ground right now:

1. Coorparoo, QLD (The Infrastructure Catch-up)

As the Brisbane median house price pushes toward the $1M mark, Coorparoo has become a “prestige” destination that is pricing out the middle class.

The House Reality: Median house prices have hit $1,800,000.
The Unit Opportunity: High-quality 2 or 3-bed units sit at $760,000.
The Gap: A staggering $1,040,000 difference.
The Play: Investors are targeting the “3-bedroom townhouse” here. You get the elite school zones and lifestyle for 42% of the house price, with unit values growing at 12.6% annually.

2. Victoria Park, WA (The “Villa” Yield King)

Perth is the tightest market in the country. Listing volumes are 40% below the 5-year average.

The House Reality: Median houses have surged to $1,050,000.
The Villa/Unit Opportunity: 1970s-80s brick-and-tile villas sit at $510,000.
The Gap: A $540,000 difference—essentially a “two-for-one” play.
The Play: With a 5.7% gross yield, these assets are cash-flow resilient. You are buying the same proximity to the CBD (6km) for half the price of a detached house.

3. Magill, SA (The Education Spillover)

Adelaide led the country in quarterly growth this December. Magill is the sweet spot where “old money” postcodes meet “aspirational” young families.

The House Reality: Median houses are $1,177,500.
The Townhouse Opportunity: 3-bed townhouses are trading at $710,000.
The Gap: A $467,500 buffer.
The Play: Unit growth in Magill hit 17.3% this year. It is the perfect “Lower Quartile” play—buyers want the postcode and the schools but can only afford the townhouse entry point.

Part 3: The “January Strike” Checklist

The first two weeks of January are a “golden window.” Most buyers are still at the beach, but motivated sellers are ready to talk. Use this checklist to be ready by January 5th:

[ ] Audit Your “Credit Hygiene”: Close unused credit cards and reduce “Buy Now, Pay Later” limits today. In early 2026, the banks will be looking for any reason to trim your borrowing capacity.
[ ] Target “Stale” December Listings: Call agents and ask: “Which of your campaigns failed to sell before the Christmas shutdown?” These vendors are often the most motivated to close a deal in week one of January.
[ ] Stress Test at 4.0%: If your investment property doesn’t work with an RBA Cash Rate of 4.0%, walk away. The “Gap Play” in the mid-sized capitals usually passes this test with flying colors.
[ ] The “Three-Bed Footprint” Pivot: Prioritize 3-bed townhouses or large 2-bed villas. These are the “new houses” for young families who have been priced out, ensuring high occupancy and capital growth.
[ ] Secure an “Unconditional” Buffer: Have your deposit and pre-approval ready. In a low-stock market, the fastest offer often beats the highest offer.

🚀 The Bottom Line

The 2025 data shows that the “wait and see” strategy has cost investors dearly this year. As we head into 2026, the winners will be those who recognize that affordability is the new driver of growth. Don’t chase the “peak” of the house market in Sydney or Melbourne. Look at the “Gap Play” in cities where the engines are still roaring and the rental demand is insatiable.