Another month, another surge in property prices and yet, underneath the headlines, there’s a more complex and compelling story unfolding.
In this July edition of Behind the Numbers, I sit down with Cate Bakos and Cameron Kusher to unpack the numbers, pressures, and possibilities shaping today’s property market.
What we discussed is a landscape marked by cautious optimism, price holding sellers, surprising investor moves — and some very determined first-home buyers.
The Fear Factor: Why Buyers Are Back
Let’s start with what’s driving the current momentum. We’ve seen six straight months of national price growth, and yes, interest rate cuts have played a part, however as Cameron noted, it’s not just what’s already happened it’s what people expect will happen that is driving decisions.
With more rate cuts likely on the horizon, buyers are jumping in early, hoping to ride the upswing before competition and prices climb even higher.
Cate offered a deeper emotional layer: fear. “People remember how it felt in 2021 when property was gaining more than 1% a month. They watched opportunity slip through their fingers. They’re scared of that happening again.”
This mix of financial logic and emotional urgency is fuelling a buyer market that’s bracing for another sprint.
A Patchwork Market: From Darwin to Hobart
Not all cities are moving at the same pace. Perth, Adelaide, and Brisbane continue to lead the charge with strong growth. Darwin often the underdog has emerged as a surprise frontrunner, boasting a 2.2% monthly increase and 6.4% rental yields.
Meanwhile, Melbourne and Hobart are moving at a more modest pace. In Melbourne, prices are up just 0.5% over the past year, while regional Victoria is faring slightly better.
Stock levels, too, are painting a mixed picture. Perth and Adelaide are seeing constrained supply, driving prices upward. But in Sydney and Melbourne, there’s plenty of stock — it’s just not shifting. Why? Cameron believes many vendors are simply not motivated to meet the market. “They’ll sell if they get their price — otherwise, the property stays put.”
Cate added a twist: many of these properties are being quietly offered off-market. Not all of them are gems. Some are overpriced, others are hard sells. Buyers need to approach these with a critical eye and a clear plan.
Investors: Leaving or Leaning In?
It’s no secret that Victoria’s rental reforms and increased land tax have led to investor fatigue and some are pulling out. But here’s the surprise: out-of-state investors are moving in.
As Cate explained, Melbourne now represents “value” compared to Sydney or Brisbane, and some savvy investors are betting on a turnaround. The theory? Mean reversion. Melbourne’s time will come again.
But even as investors circle, the rental market is tight. National vacancy rates are tracking at just 1.7%. Rents are nudging up again, though Cameron warns that affordability is hitting a ceiling. “People just don’t have the spare cash. They’re downsizing, moving further out, or making sacrifices elsewhere.”
In the middle of this squeeze, creative solutions are emerging — like co-living arrangements in outer suburbs, where three-bedroom homes are leased to three separate tenants. It’s not glamorous, but its helping people stay housed.
Build-to-Rent: Silver Bullet or Shiny Distraction?
Build-to-rent is the current darling of policymakers and developers, especially in cities like Melbourne and Canberra. On paper, it offers security — longer leases, well-designed buildings, even yoga studios.
However these are premium products. The rent is high, and the offering is mostly one- and two-bedroom apartments in inner-city areas. It’s not solving the affordability crisis and certainly not helping families who need space on a budget.
Cate hit the nail on the head: “The real rental crisis is at the bottom end of the market. Families need older-style, affordable homes and that stock is vanishing.”
The Headwinds Ahead
Cameron flagged affordability as the biggest ongoing headwind — especially in cities like Brisbane, Adelaide, and Perth where price growth has outpaced wage growth. Meanwhile, government housing targets are falling short, new builds are lagging, and construction costs remain stubbornly high.
And while interest rate cuts may buoy the market for now, long-term structural challenges remain. Investors are disillusioned, renters are stretched, and policy is still playing catch-up.
Cate didn’t sugar-coat it: “Investors don’t act out of altruism. If the numbers don’t stack up, they’ll walk away. And without them, who fills the gap?”
Cameron echoed the sentiment: “We need a full-scale tax reform, not piecemeal attacks on negative gearing. Otherwise, we risk creating the perfect storm and no one will be ready for it.”
What’s Next?
Despite the headwinds, there are glimmers of momentum. More first-home buyers are expected to enter the market in early 2026, thanks to shared equity and deposit schemes. Renovation activity may rebound as trades and materials free up. And as spring approaches, a fresh wave of listings could bring new energy.
But perhaps the biggest takeaway from July? We’re in a market shaped as much by emotion as economics. Fear, fatigue, ambition, caution they’re all in play. The numbers might tell one story. The people behind them are telling another.