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Investors eye “golden window of opportunity” in property race to year’s close
With strong demand, high confidence, and a rush of first-time buyers, investors have been entering the final 2025 property race, yet a short window of opportunity remains. Here’s what’s really happening on the market.
According to PRD's latest report, the remainder of 2025 and early 2026 will see investors and first-home buyers alike rush to secure their next property.
PRD chief economist Dr. Diaswati Mardiasmo said the latest data have shown that easing RBA policy, resilient economy, and rising consumer confidence have boosted buyer activity, with household savings gradually recovering despite ongoing global and domestic uncertainties.
She said that the market has been favourable for investors, as lower interest rates have increased borrowing capacity and lending has increased by 15.8 per cent over the year to March.
Additionally, tight vacancy rates, which have persisted at around 1–5 per cent in capital cities and as low as 0.4–1 per cent in regional areas, continue to drive strong rental demand.
“However, rental growth is plateauing as more investors return to the market, leading to smaller, more typical rent increases. While rents remain high, returns are stabilising rather than surging,” Mardiasmo said.
Simultaneously, house prices have rebounded in 2025 on the back of rate cuts; however, unit prices, which are still 30–35 per cent cheaper, have been outpacing houses amid limited supply, offering buyers a narrowing opportunity and driving price growth further.
In terms of opportunities, PRD said that Melbourne offers the best value as prices are rising at a slower pace, allowing investors to maximise returns, followed by Sydney with steady growth potential.
By contrast, Brisbane, Perth and Adelaide have been experiencing rapid price growth, which, while strong for capital gains, is beginning to compress rental yields.
“Investors are back, prices are going up, which means that owners who have equity are going to be happy, and first-time buyers are also getting some assistance; everyone has an opportunity,” Mardiasmo said
“From an investor perspective, with lower interest rates, borrowing power increases, and it's easier to finance at the moment. If they can borrow a little more, there are more opportunities, more markets.”
The ‘real’ impact of the 5% scheme
While the whole industry has been debating the impact of the 5 per cent scheme on the market, Mardiasmo said the new policy will only impact investors targeting the more affordable market.
“If you are an investor who's looking at that lower band pricing, then you are going to get more competition for the first home buyers.”
“If you're going for that premium market as an investor, then you're not going to have that first buyer competition for the houses.”
While she said that the scheme would push dwelling prices up nationwide, she said the unit market will see the highest surge of first-home buyers nationwide due to the affordability cap.
PRD data showed that units are expected to dominate planned ready-to-sell stock until the end of 2025 in nearly all capital cities, excluding Adelaide, driven by a limited housing supply, which will drive price growth further across all property types.
“If your next move is to buy a unit, you’ll definitely have more competition,” she said.
Heightened competition
While the market has been more favourable to investors and first-home buyers alike, Mardiasmo said competition is expected to continue increasing as demand and confidence rise.
Data showed that buyer confidence has surged, with the time-to-buy a dwelling index jumping 37 per cent in the year to August 2025, reaching 97.8 points, its strongest level since before the cash rate hikes of 2022.
Nationwide, buyers believe it’s the right time to purchase, with Tasmania leading the nation at 113 per cent growth, followed by NSW at 48.3 per cent, while South Australia, at just 3.4 per cent, offers fresh opportunities for first home buyers.
“With time to buy a dwelling index increasing in every market, whether regional or capital cities, more buyers will try to get their property before the end of the year.”
With the new 5 per cent scheme starting in October and the next RBA meeting in November, where a possible rate cut could further boost buyers' confidence, Mardiasmo said investors are now in a sweet spot.
“We know that many people want to get into their homes by Christmas or move over the school holidays, and that's going to happen as well towards the end of November, December.
“It’s all about timing; buyers need to be ready, there are still opportunities, but if they do want to get into the market, then they need to gear up and get their ducks in a row and be ready to compete.”
“So at the moment, investors have that sort of golden window of opportunity to actually be able to capitalise on what's happening in the market,” she concluded.
