Australian Property Market and What to Do in This Scenario

Megatron on 03/07/2025 - 14:58
Last edited 04/07/2025 - 14:41 by 1 other user

Hi all, what is the general consensus on where the AU Property market is heading in the next couple of years and how sustainable it is? I will put a few pointers for discussion

  • Canberra and Hobart Markets both had a great start to the post-Covid boom and then suddently turned flat and even negative in some places. Both as a whole are currently sitting at negative 12 month returns.
  • Perth, Adelaide & Brisbane have all seen close to 90% price rises since covid. I dont know about Perth and Brissy but I just cant understand the Adelaide market (pointers below)
  • Sydney is already too expensive and yields are low for investors. Melbourne on the other hand, seems to be going up in some pockets but long terms forecast are still not good. A lot of investors are still not keen given the crappy tenancy laws there

Now why I don't understand the Adelaide market -

  • Adelaide is mostly a service industry with not a lot of manufacturing and not much tourism either. Job and wage growth has not been the same as the housing growth. There are currently no family homes that one can buy for less than $650k and those are in below average suburbs. To get into a mid-range suburb, one needs to spend $1m+ and in a good suburb with good schools, $1.4m+.
  • There is a massive pipeline of new builds but they take time due to lack of Government support and labour/material shortages. Those new builds are also further away from city in North and South. Whatever is being built in city fringe is mostly apartments and terrace homes.
  • Adelaide has the lowest population growth forecast when compared with eastern states and Perth so all these new houses when they hit the market, Adelaide risks being over supplied too. But since the government is trying really hard to keep the housing problem, it might be 4+ years before this supply hits the market.

There is lots of talk about Adelaide market continuing to grow as the interest rates are cut. The property investors, developers and sellers seem to all say the same thing - "The government can not let the property market crash and no one ever loses money". They say Perth of a decade ago is never to be repeated.

Question is - Are these developers correct? or is Adelaide about to turn into a Perth of 2010s?

Now here is a scenario to consider for a family and what you would do? To make it easier, lets say they are 40 years old and plan to retire at 60 -

  • Have a PPOR with mortgage and enough money in offset to pay off 75% of the loan.
  • Have Inv Properties worth $2m with $1m owing and paying themselvesoff. One of them is at the end of growth cycle and may not see further growth for 5 odd years.
  • Super balances are about $200k only and forecast at age of 60 is about $1 - $1.2m

What advice would you give to this couple so they can comfortably retire at 60? Should they pay off their house as quickly as they can and live debt free? Or would you think it is better they buy another investment property say for $650k whichin 20 years will likely be $1.5m.

They asked a financial planner and were suggested to increase super contribution and invest in managed funds. They didn't like it as they do not want to be in a situation where their money is stuck in super and they needed it. They also aren't comfortable with managed funds as have previous bad experiences in the share market.

Appreciate some genuine discussions on both points above.

Poll Options expired

  • 15
    Adelaide is the best market to invest
  • 17
    Perth is the best market to invest
  • 34
    Brisbane is the best market to invest
  • 46
    Melbourne is the best market to invest
  • 4
    Canberra is the best marekt to invest
  • 24
    Adelaide property market will crash like Perth did in 2010s
Financial

Comments

            • Protractor on 04/07/2025 - 10:10

              @Muppet Detector: It's slang for religious bargain hunter. Or one who likes to hold onto their cash. Or never buy a round.

              (Not my etymological invention, sorry.

              I agree with the benefits of donating.(But CoL crisis!)

              • Muppet Detector on 04/07/2025 - 10:20
                -1

                @Protractor: Yeah, bordering on being a bit offensive there.

                Think a bit more and "read the room" before you dig yourself into a deeper hole.

                • Protractor on 04/07/2025 - 10:22
                  +1

                  @Muppet Detector: No it's not. it's Australian colloquialism. There is even a username tight-arse here. JHC if ppl read more into that it's their issue ,not mine.

                  https://redkiwiapp.com/en/english-guide/slangs/tightarse

                  • Muppet Detector on 04/07/2025 - 10:31

                    @Protractor: I meant your entire stereotype of the whole tight arsed rich person using this site and this whole interaction since you started with this site being for battlers.

                    I thought I knew what tight arse meant, but TIL that the definition also included religious in the meaning.

                    So, I can hunt bargains if I want as long as I'm not religious? Then I'm no longer a tight arse?

                    Or, because I'm not a battler, I must be a tight arse if I'm using this forum?

                    • Protractor on 04/07/2025 - 10:34

                      @Muppet Detector: Geez , I hope you have way back from that tangent.
                      I think it's ironic, I pointed it out. I used a common slang term . If I have breached a human right, I apologise.

                      https://www.youtube.com/watch?v=Cyi2b6ecoq8

                      Religious in the comment had nothing to do with worshipping religion.

                      See Number 3

                      religious /rĭ-lĭj′əs/
                      adjective
                      1. Having or showing belief in and reverence for God or a deity.
                      2. Of, concerned with, or teaching religion.
                      "a religious text."
                      3. Extremely scrupulous or conscientious.
                      "religious devotion to duty."

                      EDIT>
                      https://www.tightarses.au/

        • IcySpicyStew on 06/07/2025 - 00:29
          +1

          Sheesh, the owner of the site generates enough income that he gives tens of thousands of dollars away to charity! Just in the last few months I've witnessed him donating over $80,000 to charitable causes.

          The worst kind of "donors" are the ones who advertise it like there is some hidden agenda and I have a feeling you're falling for it

  • afah0447 on 04/07/2025 - 07:42
    -1

    My $0.02 worth is invest in Brisbane given Olympics is on the horizon.

    Otherwise, you are doing pretty well and will do fine in retirement given your current position.

  • Inertia-g on 04/07/2025 - 08:12

    Start by modelling how much you think you need to retire - you may find you can hit that before 60.

    If I were in that position, I would start debt recycling the PPOR loan into an ETF - dollar cost averaging in, let the properties keep paying themselves off until the PPOR. I’d also load super, making sure max contributions are made, and carry forward concessional contributions are consumed.

    Left field suggestion - look at investment bonds. You contribute to them over a 10 year period, and the tax on gains are contained to the bond, so when they mature there is no tax to pay. If I were a bit younger (up to 47) I would set up a series of investment bonds - 1 each year for 10 years. When the first bond matures, I’d stop work (or go part time, or whatever I wanted) and live off the funds for the following 10 years as each one matures, until I reach 67 and have access to super. You would need to do the modelling on how much you need to live, projected significant purchases, etc etc etc

  • rexanator619 on 04/07/2025 - 08:21
    +1

    What makes you say that the Melbourne Market may not have long-term growth?

    Also, Ozbargain is not the best place to ask for financial advice.

    If I were you, I would invest in as many properties as possible (ideally you want both capital growth and cashflow) and let them grow. Sell all of them off later and buy your dream home with cash or pay off liabilities and retire debt free.

    • Megatron on 04/07/2025 - 10:56

      All modellings suggest that whatever growth Melbourne is going to get is going to be slower than other large cities.. this is mostly due to a large available supply and tenancy laws that have pushed investors away from Melbourne. No one can predict if there will be a sudden turn around, so you have to go by the data that is available.

  • Potatohead82 on 04/07/2025 - 08:26

    Really love how the direction of this conversation is going. I wasn't expecting this. Well done to the community. On the other hand, I also see the investor's perspective.

  • saltypete on 04/07/2025 - 08:49
    +1

    I know the Adelaide market pretty well and I dont understand it atm either.
    Adelaide has always been a pretty low, steady rise if you buy the right locations but the recent rises seem to make little sense unless its coming from interstate investment buyers.
    I dont see how the rises of the last few years can keep going and I wouldnt be blindly investing in some areas based on recent performance. I think it will settle at some point to a multi- year stasis as CPI catches up. It has done this before. It is a very good place to live if you buy the right places - and some of the northern suburbs mentioned are the wrong places…..
    As for your mythical couple - buy a decent place to live. Maybe even buy a extra place you might want to downsize to eventually and have it as a well maintained rental, shove extra into the mortgage and have this as your emergency fund. Have some shares you can fiddle with and shovel a fair bit into super.

    • Megatron on 04/07/2025 - 11:04
      +1

      I think it will settle at some point to a multi- year stasis as CPI catches up

      I think it will happen eventually, specially given the population forecast for Adelaide which is lowest of the major cities on east coast and Perth. If there was not enough rent demand, the investors will go away too regardless of if they are local or interstate.

      Regarding the couple - It is a real couple and already have a decent place in a decent suburb.. the house is exactly as they want it and has already been renovated to thier taste.. the neighbourhood is apparently so good, they dont want to move from there and it will likely end up being there forever home.

      I must also add, they are a hard working couple who pay fair share of taxes, are not relaint on any benefits from the government and want to keep it that way. In their words, they wouldnt want to live off a government paid pension and believe in building wealth for themselves to pay off for their lifestyle.

      • saltypete on 05/07/2025 - 23:20
        +1

        For your couple they are obviously on a good track. If I had my time again I would have started learning about shares and invested modest amounts in the share market. If they do this it will give them time to slowly grow share holdings and knowledge about the market over the next decade or so. This will potentially give them capital and an income stream to allow them to retire earlier if they want to.
        Also, they should avoid the 'transition to retirement ' trap. Working part time as one approaches retirement is a mugs game imo. You are still committed to being at work, often hassled to achieve full time results on part time hours and get reduced leave entitlements. Only really works if your health is compromised as an alternative to early retirement.

    • Benoffie on 04/07/2025 - 19:41

      Yes, previously it did it in 2000-2003 and then again around 2011-13 from memory

  • SlickMick on 04/07/2025 - 09:20

    re what the couple's scenario: They've really made poor decisions, and also refused sound advice. The PPOR loan should be fully offset. The concessional super contributions should be maxed. Only then should they consider putting extra funds against investment loan - and ideally that should be an offset account in case they change their mind and want to invest further.
    This isn't opinions, it's maths, and every financial adviser should say the same thing.

    re which city: I don't think it matters, so long as people want to live close to the city. Only a major change like a city becoming a ghost town or employers moving to regional areas or new cities being built etc will stop the wealthiest people wanting the best houses, and thus prices rising. Until the Jetsons' age arrives, real estate will be valuable.

  • Megatron on 04/07/2025 - 11:09

    They've really made poor decisions, and also refused sound advice.

    The consensus here seems to be that they are doing fairly well for someone who is about 40 years of age.

    The PPOR loan should be fully offset.

    It already is with all the money they have available.. they have no means to top up the offset with remaining 25% loan balance.

    The concessional super contributions should be maxed. Only then should they consider putting extra funds against investment loan - and ideally that should be an offset account in case they change their mind and want to invest further.

    Lots of people, including myself, do not like the idea of locking away money for 25+ years assuming they will last long enough and have energy to do in their 70s what they want to do now.

    This isn't opinions, it's maths, and every financial adviser should say the same thing.

    It was probably designed 3 decades ago in 80s and 90s and is no more relevant. The financial and property markets have since evolved and there are other options. People also have a lot more desire to do things that people in 80s and 90s didnt, due to social media and marketing that is now ingrained into the society.

    I don't think it matters, so long as people want to live close to the city.

    Yes I agree with you on this :)

  • Chewy2221 on 04/07/2025 - 12:10
    +1

    Follow the money. There is an old RE adage that you should invest where governments are investing in infrastructure etc- this generates jobs, housing demand & higher prices

    • Megatron on 04/07/2025 - 13:02
      +1

      The current government trend is more of a "help our developer friends" kind, at least that is the case in Adelaide.

  • sietes on 04/07/2025 - 12:47
    -1

    "Melbourne on the other hand, seems to be going up in some pockets but long terms forecast are still not good. A lot of investors are still not keen given the crappy tenancy laws there"

    If you think that renter's having basic rights is crappy then i really hope you never own an investment property.

    • Megatron on 04/07/2025 - 12:59
      -2

      If you think that renter's having basic rights is crappy then i really hope you never own an investment property.

      Basic rights? if you call screwing landlords "basic tenancy rights" then yeah ok.. otherwise, I would just assume that you have no idea what those tenancy law changes are.. those laws that you are calling "basic rights" can soon turn into a nightmare for tenants if the demand-supply metrics changed in Melbourne.

    • Muppet Detector on 04/07/2025 - 17:51
      -1

      If you think that renter's having basic rights is crappy then i really hope you never own an investment property.

      What do you consider those basic rights to be?

      The Melbourne Tenancy laws really do seem extremely harsh lately.

      They will drive a lot of mum and pop investors out of the market which is actually a good thing as they're usually the ones where every cent counts and often struggle to make timely maintenance and repairs on their rental properties.

      The larger investors treat the market as a business and generally run it accordingly. They factor in all the maintenance etc, understand their obligations (the law) better and more capable of meeting those obligations which results in better outcomes and conditions for their renters.

  • lew380 on 04/07/2025 - 15:00
    +2

    All the experts in the land and all the discussion miss the elephant in the room. We are bringing 1 million people each year into the country for cheap labour and to crush the middle class, can't build our way out of this self inflicted wound. Stop complaining of you voted labour, to be fair, the Libs are just as corrupt.

    Just to preempt the "but we need immigrants, what about the last 70 years with the Italians, and Chinese etc" yes, at 40-80k per year, it was manageable and could be planned for, mass immigration is just a mess, the government fk us all over we we fight over who's the racist and who's the over nurturing lefty.

    • SpainKing on 05/07/2025 - 19:59
      -1

      Just patently incorrect according to the ABS

      • Net overseas migration was 446,000 in 2023-24, down from 536,000 a year earlier
      • Migrant arrivals decreased 10% to 667,000 from 739,000 arrivals a year earlier
      • Largest group of migrant arrivals was temporary students with 207,000 people
      • Migrant departures increased 8% to 221,000 from 204,000 departures a year earlier.
      • lew380 on 07/07/2025 - 23:37

        I million came in, 600k left or were transient. Depends on the year. You can cherry pick a different year for a cheap victory point n your mind. If you want to pick a victory out of the ashes, well enjoy it.

        • SpainKing on 08/07/2025 - 00:53

          Last I checked 446,000 ≠ 1,000,000. Seems like you're the guy cherry picking when you talk about gross immigration instead of net immigration, and the only time it's been close to 1 million is when we reopened post COVID. Can't see any smoke on the horizon, but feel free to continue blaming immigrants for everything and see where it gets you

          • lew380 on 08/07/2025 - 08:04

            @SpainKing: So it has been close to 1 million, thanks for admitting to playing number games. Immigration is a large part of why the housing is so competitive. It's not complicated to understand. We only build 200k houses a year, we import 500k who stay. One number is bigger than the other! You can also blame increases in divorce, increases in holiday homes etc, but by a very wide margin, it's immigration. Just say it, don't be scared to think because of the threat of others lebelling you.

  • Meho2026 on 04/07/2025 - 15:20
    +1

    Keep building the offset account until the PPR loan is 100% offset cos that’s non deductible debt.
    Start thinking of the offset amount as the emergency fund that is immediately available.
    The super balance is very low for a 40 year old. If the timeframe of investment is 20+ years, it doesn’t make sense not to focus on making extra super payments. Some of that adverse risk to investing in stocks via super, is offset by the tax benefits as money goes into super and out at the other end. A transition to retirement pension can be drawn from super tax free from age 60.
    In general, property investment has historically been a great investment but that is basically fuelled by government agendas that have dramatically increased the population by immigration while at the same time failing to stimulate construction of homes.
    Pay attention to what the Victorian government has done to property investors with land tax, minimum housing requirements and tenants rights. That’s designed intentionally to drive mum and dad investors out of the market and it works. The same thing could happen in other states depending on the government in power.
    If you subscribe to the concept that, in the near future, we will own nothing and be happy then there is an agenda where all housing will be owned by corporations. There is evidence to support that with the surge in build to rent buildings and reports of global financial giants buying residential housing stocks on a large scale.
    The point being, property investment might end up being the riskiest investment.
    I wouldn’t advise anyone to buy a property investment in the whole state of Victoria. Id just ignore Adelaide, Perth is unpredictable long term, you’ve missed the boat by a long shot for SEQ. If you can find an affordable property with a good yield in Sydney, it’s probably the best bet.
    At the end of the day the financial planner is correct, get that super balance up.

    Be mindful that home ownership is on the cusp of being completely unachievable to the younger generations and there’s a lot of people who believe property investors are responsible for that.

  • Brick Tamland on 04/07/2025 - 15:43
    +1

    And we wonder why the property market is cooked when people look at like this.

  • dankru on 04/07/2025 - 17:41
    -1

    You lost me at “crappy tenancy laws”

    • Protractor on 04/07/2025 - 20:54
      +1

      Judging by the direction of their comments, I find it hard to believe the OP has even a mediocre genuine concern for tenants,
      ( beyond the income and opportunity side of things).

      • dankru on 05/07/2025 - 08:30

        Yeah , they meant laws that give tenants rights.

        • Megatron on 05/07/2025 - 09:51

          So are we calling avoiding paying rent, "renters rights" now?

          There are so many stories where VCAT did nothing to evict tenants until it got to 8-12 months of unpaid rent.. see the example below.

          There are no insurances that cover for that sort of rent arrears.. but I am sure it will make some people here happy

          https://www.dailymail.co.uk/news/article-14314515/Landlord-u…

  • thebombout on 04/07/2025 - 18:04

    How can you vote against KT, Mare of Canberra?

  • djesr on 04/07/2025 - 18:51
    +1

    I live in Adelaide and can have some input on what's going on here.

    Adelaide has absolutely shitty public transport. If you want to go from one Subaru to the next you pretty much need to come to the CBD and catch a bus. So people are very used to driving which results in traffic. Which means people do not want to live too far from work

    Majority of white color jobs are in the city. So with shitty public transport. People want to stay relatively closer to the city. Hence the metropolitan areas still have high growth. Also Adelaide still has very high immigration IMO. And most of these immigrants and asian Australians want to send their kids to "best schools" which are also in the metropolitan area.

    Having said all of this, the high growth in property prices are caused by the lack of supply. This is evident in country towns in SA as well.

    Unless something drastic happens I don't see it slowing down.

    I understand Perth and NT had a growth when the IR were low around covid. Mainly driven by investors in the eastern states just buying property site unseen. And these properties are actually far from any metropolitan area hence low tenancy rates

    • Megatron on 05/07/2025 - 00:26

      Yeah the short supply is a problem.. but if you look at the population growth forecast for next 5 years and the number of houses being built up in North, South and Westend site, you would wonder how long before we hit an over supply line.. I would think 2028-29 at this stage but given current prices, unaffordablity is a big risk.

  • nikey2k27 on 04/07/2025 - 20:44

    Put all in Townsville it was good ride last time I pick up few cheap places or EFT

    • Protractor on 04/07/2025 - 20:47

      Yep, it's going to be crawling with yanks in uniform, going fwd.

  • mrvaluepack on 04/07/2025 - 22:28

    I have much more than the couple, so here was my strategy and advice when I was at that stage.

    IF the couple plans to retire in Australia AND continue to work until 60. The financial planner is correct - pump up the super, default balanced super fund is fine.

    If want to retire earlier and/or retire in another country, then don't put into super. Put all investment money into an all-in-one ETF (easy to manage) like VDGR for earlier access to funds.

    Don't waste time worrying about Adelaide property market, can't predict the future. Don't buy another investment property due to current Australian rental laws favoring tenants and high land taxes.

    • Megatron on 05/07/2025 - 00:33

      Good to see some of the few people here who dont hate investors.

      By lot more, I am assuming we are talking $25m or over wealth?

      It will take a lot of convincing to get them to consider etf investing.. last I asked them, they said they would consider if there was another covid like crash but at the market peak they feel it is very risky and their previous experience has been bad.

      They arent looking to put extra money into super as yet.. they could be selling one of their property in next 2 years and I have strongly suggested they use their caps then.. so not making super contributions currently is not a big negative in my opinion.

  • Muppet Detector on 05/07/2025 - 02:25

    Thousands at risk after super collapse

    Put your money into Super they said.

  • SydBoy on 05/07/2025 - 08:51

    The only reason Adelaide is booming is because so many naïve young couple were told that they will be living without job if they start investing at younger at so by the time they turn 40 all they can do is have holiday in Europe or Asia and no work at all as property rent will pay for everything without need to work… lol :D :D :D

    Now, this young couple mostly coming from Sydney and Melbourne couldn't afford to buy investment property in those two cities so the only option they been fed was Adelaide (it was Brisbane before) where house prices were low and young people with limited superannuation balance or borrowing capacity can buy something !!!

    so that is how Adelaide started to boom !

    None of the political party has balls to stop misuse of tax benefit that property investor get so i don't think this will change at all … ! we get more migrant who will end-up being slave to landlord or just start doing dodgy stuff to get ahead in the race !! :D :D :D

    probably last election victory for labor if they don't sort out housing affordability issue. !

    RBA governor don't care about property price going up is another sad state of affair ! !

  • Hangryuman on 05/07/2025 - 10:45

    I check Sydney values monthly - since the previous month, when unit sale prices had been largely flat since COVID, last month there was a distinct jump, and news reported increased activity.

    so as usual - the best time to buy was 20 years ago - the best time to plant a tree - is now …

    start with your family values, who you want to live near for life and emotional support, then career prospects, where you can earn and save the most money after tax and living expenses, then seek the optimum micro-location if you want to live there, but also consider for tenants who also want a nice convenient place - best to avoid investment properties interstate or remote from where you live as they too easily become serious problems with repairs and management and dodgy managing agents ripping you off because they know you're not around to keep an eye of things

    years ago Lakemba was way cheap for old rental units handy to train about 45 mins to Sydney Central Station, e.g. 2 bedroom units -
    $420K auction guide - https://www.domain.com.au/8-89-91-hampden-road-lakemba-nsw-2…
    $468K for sale - https://www.domain.com.au/8-11-myee-street-lakemba-nsw-2195-…

    • SydBoy on 05/07/2025 - 20:25
      +1

      Who wants to live in Palestine ? That is why Lakemba still cheap compared to surrounding.. !

    • Muppet Detector on 06/07/2025 - 06:39

      ROFL => Those properties each list four features.

      One of those features is a bath!

      And that one at the top looks feral. Not sure I'd let my dog live in that.

  • darkmoss on 05/07/2025 - 18:05
    -1

    wait for your elders to die

  • IcySpicyStew on 06/07/2025 - 00:18
    -1

    Become a valuable member of society

  • apple2016 on 06/07/2025 - 07:38

    The government can not let the property market crash and no one ever loses money

    As long as labour govt is in power sure! But its not going to be forever…

    Also OP wants advice from ozbargain and not from a qualified FA!… 🤔

  • martin_henry on 07/07/2025 - 12:55

    First & foremost, you mention a lot of short- & medium-term aspects, but the best way to invest in property in our market (where the cost to of each transaction is incredibly high) is to consider the long-term.

    Second, yes, many people stand to be wrong: Canberra doesn't have a large vested interest in ensuring all property markets stay strong.

    Third, my advice is to get back to basics (pay down debt while increasing earnings & managing costs, and then worry about investments), unless they want to trust professional advice. If a financial advisor can't explain the variances in their expectations (ie "I think Adelaide property will grow by X but could be as little as Y") , then go find another one.

    They also aren't comfortable with managed funds as have previous bad experiences in the share market.

    There are plenty of managed funds that will use instruments besides individual stocks!!

    • Megatron on 07/07/2025 - 13:15
      +1

      but the best way to invest in property in our market (where the cost to of each transaction is incredibly high) is to consider the long-term.

      Yeah, the investment horizon is 20 years as mentioned in the post.

      Canberra doesn't have a large vested interest in ensuring all property markets stay strong

      My personal opinion is, they do have vested interests in keeping prices high and growing them as the revenue collected from these transactions is significant and the government would not want that revenue to drop due to concerns around fiscal deficit.. moreover, the land owner by the government also appreciates and if you look at the Adelaide market, Government has continues to release public land to developers while pocketing premium price.

      pay down debt while increasing earnings & managing costs, and then worry about investments

      This is what most of the non-investor people were doing pre covid.. Post covid environment has turned it into some sort of a race due to the appreciation in property people have seen and heard in media over and over again.. In Adelaide, Brisbane and Perth, property has gone up 25%+ YoY for last three years.. so people are now wondering if their debt at 6% is really worth paying or if they should get onto the Property wheel to race ahead.. the opportunity cost of not doing it in the current environment is just too high.. I know one guy, who bought investment property for his Kids who are in early teenage.. all driven due to FOMO.

  • [Deactivated] on 07/07/2025 - 14:55

    @Megatron
    Thought provoking thread - I'm mostly in agreement with you.

    Going by the main topic of the thread and imo it depends.
    While tax incentives are mostly provided on a federal level (Aus tax office) its nuanced and can be influenced state by state as well - (just have a look at Victoria). There's a few things that will influence property in the future (in my opinion) and state by state.

    State Debt levels (and how the government tries to recover these costs)
    Federal Debt levels (we're going to pass 1 trillion in debt soon… which is absolutely ridiculous but how the federal government tries to recoup costs… can only be in the form of taxation)
    Federal tax schemes (Jim Chalmers and Albo might start changing things up soon - surprise!)
    Rise of AI (we're seeing the state and federal government and younger generation demonise companies/ private sector (and for some reason still turn to ETFs) and governments are becoming the employers, gutting the private sector and commercial property in CBD's as well)
    Reduction in productivity (which ties a little to the government being a larger source of employment for Australians - even as subcontractors)
    Government Guarantee for first home buyers at 5% is going to light a fire under property nationwide… and then either a wane… or a crash.
    Immigration levels - and how much immigrants A) want to stay and B) how deep in debt they want to be.

    What type of property has been purchased (and materials) - I would focus on standalone Houses as units have costs associated like strata which can skew stats (and alot get burned from this as you the individual owner have no real say in how funds are allocated or spent and strata companies are mostly crooks). So for the purpose of investing… we'll say small green title houses.

    Sydney - will likely always be high… (just not a crash - might)
    Perth, has some more rises in the next 12 months (I see things waning after that and while not guaranteed, a potential crash again)
    Adelaide, less so (Sale of Santos might also influence things) but I'm 50/50 about this market (some growth but also maybe waning or slight declines over next 5-10 years)
    Brisbane will have some growth especially if your sale is around or before the 2032? olympics (now is probably a good time to get on board)
    Melbourne - is in a rut, but now might be a good time to get on-board - as much as things are "skewed" towards tenants… most tenants for cheap properties wont get their shite together to object and take it to a tribunal and the backlog is huge (also if they're working towards buying themselves its not worth their while focusing on something they cant change/ will get passed onto them with a rent rise in the future) - some taxes the state government are putting on non owner-occupiers isnt good but Melbourne is getting a massive increase in the GST allocation.. so who knows what the future has in store for it.
    Canberra - might rise some more… all those tax payer funds for fat politician salaries
    Darwin - while underpriced… I've heard stories (I wouldn't risk that market), same with north Qld (cyclones, flood zones etc).
    Tasmania - maybe for an Airbnb… however I'd focus on Melbourne.

    nationwide - labor is building its number of properties for with deals with developers - so the next generation can enjoy apartment living - yay. - developers build more places and density in a country with one of the largest land masses in the world… (should really consider spreading out).

    • financial literacy - future generations need to increase theirs and work towards what they want (some might be outliers but most simply throw their hands in the air and say they'll never afford a place and blame the boomers).

    So short term (12 months with Govt Guarantee) we'll see some rises.
    with long term (some states I think will lull after that, others will fomo and others will potentially decline).

    My "bets"
    Every market will rise after the 5% Govt first home guarantee (and this is for green title houses, no strata) so after 1-2 years here are my bets:
    Sydney = safe bet (but high capital to get in)
    Perth = 1-2 years gains (2-5 > lull and possibly some shocks after that - after more Pommies UK people lose their visa's or if another mining bust - if a boom, the reverse - Perth market very unpredictable possible additional gains - many have been very burned in the past)
    Adelaide… unclear but it will probably lull or decline (as primary industries etc)
    Tas - wouldnt consider unless a retiree (costs of materials to get there from mainland and the realestate industry).
    Brisbane (5 years - Brisbane because of Olympics 2032)
    NT and Far North Qld (wouldnt consider - high costs of materials getting there, high costs of insurance because of flooding/ wet seasons / cyclones etc) also NT - often alot of vandalism and the renter wouldnt foot the bill.
    Melbourne is a possible safe bet in some ways - cheaper at the moment so probably has the most to rise.

    Long term 5-10 years (no real crystal ball)

    Some major concerns I have:
    Federal tax schemes (Jim Chalmers and Albo might start changing things up - CGT, asset taxes, negative gearing etc).
    Albanese sold off his property portfolio a few years back (he had 10 or so… which makes me think there's some changes coming)
    Current generation sooking about not being able to buy a house (even with the government 5% guarantee)
    Depends on immigration levels as well.

    Short and sweet on where I'd throw my money right now depending on goals:
    Brisbane possible strongest for a sell around olympics and
    Melbourne for value (potential rises)
    Sydney = safe money (along with Canberra)
    I'd stay away from: Perth, NT, Tas (unless airbnb and is your holiday home) and wouldnt invest in SA (unless to sell in 12 months - but property is long term so wouldnt buy to sell in 12 months anyway). Perth is overpriced or deemed too risky because of potential shocks.. SA because there's no future there.
    For 20 years (and provided you have the capital.. Sydney or anywhere east coast. In 20 years alot can change though…)

    • [Deactivated] on 07/07/2025 - 17:39

      I’ll add that there’s different scenarios for property investing:
      1. No intention of paying it off, go in an interest only loan betting that the rise in value will far exceed what you paid initially (and the tenant covers some of the cost) in an ideal world.. you’d be positively or equally geared, worse case, negatively geared. And then selling once it’s worth more (and pocketing the difference) (interest only mortgage)
      =risky

      Or even riskier (using the difference in equity gained to buy even more property and 10x that)

      1. Paying off the place (as fast as possible) or in cash to turn the property into paying recurring revenue (so getting a mortgage and paying principal + interest)

      2. Paying off a place in full (having a tenant to effectively “look after” the property) and parking your funds and asset.

      I’ll remove developing/ subdividing from this and focus on what most mum and dad investors would do.

      There’s variations on the aboves and the financial side varies significantly based on the purpose, if it was a PPOR, CGT and LVR, and how it’s geared.
      And the type of loan on the property..

      Other things that will affect property:
      Interest rates
      Possible wars
      inflationary events (and for how long)
      Wealth in the country (if Australia’s exports fall off a cliff the country becomes worthless)
      Levels of immigration (the more that come in, the more houses are worth)

      • Megatron on 07/07/2025 - 18:48
        +1

        You have some great points there with real world analysis.

        The only thing I will add is the people who have multiple investment properties, either have them spread across many states to avoid Land tax, or use some Trust structures.. the land tax alone is a massive killer for someone wanting to have multiple properties in a state.. to add some $ context, if in SA you have Investment properties with a land value of $3.1m, you are liable for $32k in land tax annually. That is about 4 properties, each worth about $1m each ($775k land value).. those properties will earn about $650-750 per week rent.. so literally, the gross rent from one property is all going back to Land tax office in that scenario. So if the Capital growth is not rapid, that is a big big tax liability.

        The Australian exports and immigration has a good enough future so I will be less worried about them. I am more worried about government policies that are pushing property prices so high that it becomes a very risky bet for both home owners and investors and a US like GFC scenario may be inevitable or Governments will fork out hand outs like covid and put us all under massive debts.

        • [Deactivated] on 07/07/2025 - 20:01

          Land tax is different state by state, definitely advise diversification for any portfolio.

          US like GFC scenario is a very real possibility (although that related to the banking sector and a particular asset class of CDC swaps etc in the US - the lending sector was also very loose there - APRA tightened rules so that can’t be the case here)

          Aus GFC equivalent would simply involve: unemployment to go up a few or many percentage points and the interest rates to increase also for an extended period. A global recession type event would potentially contribute to this and need to be sustained for it to affect property meaningfully in Aus.

          So barring WW3, the only thing that could affect Australia’s property prices are:
          policy changes or supply.
          Supply change isn’t going to happen in Labor’s timeline (apartment builds only)
          So policy changes are the outlier (which are in the works right now)

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