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Property investing ‘far from dead’
As the market continues to shift, investors have been left trying to work out a viable strategy to grow wealth through property. Here is how to build a portfolio in 2026.
Property Strats founder Steve Ash said that while the market was roaring at the beginning of the year, investors had grown wary of the national outlook after the budget shifted sentiment.
“Looking at January, everyone’s falling over themselves to get into good property markets, houses, etc to grow their portfolio; then six to nine months later, the interest has gone,” Ash said.
According to him, with the property market experiencing a sharp drop in activity and confidence, investors faced a vastly different marketplace.
He said that while sentiment may have been the worst he had seen in a decade, there would always be an underlying demand for homes.
“That’s the interesting thing with residential as an asset class is that while you are investing, it’s still people’s properties and where they want to live, etc.”
“So keep that in the back of your mind; there’s still underlying or inherent value. People have got to live somewhere.”
Ash said investors could still find good-quality purchases to strengthen or start a portfolio if they could identify the right markets and asset type.
Finding value
Although they were typically unaffordable for first-time investors, Ash said opportunities still existed in major metropolitan markets such as Sydney and Melbourne.
While many potential beginner investors felt locked out of the market, Ash said it was important to remember that the first purchase didn’t have to be perfect.
He said first-time investors just needed to readjust their expectations about their purchasing power and the type of asset they could afford.
“You take your medicine, compromise and go out to an area, and you buy what you can afford.”
According to Ash, while Melbourne had long experienced an oversupply of properties, high population inflows had left the capital well positioned for future growth.
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“If you look at population growth, Melbourne is starting to lead the pack again, and it’s beginning to look cheap, and this may be the time to get in,” he said.
Additionally, he said potential changes to government policies, including stamp duty and land tax thresholds, could unlock sentiment in the Victorian capital and bring investors and buyers back into play.
He said Hawthorn, Caulfield, and Brunswick offered investors opportunities to buy property in blue-chip areas, while those with a greater risk appetite could look towards Dandenong.
Despite declining sentiment in the residential property market, Ash said investing was “far from dead.”
“There’s opportunity, but you’ve got to be brave.”
Cash flow a necessity
Ash said that while investors could previously expand their portfolios based entirely on asset growth, they now needed to balance growth with yields for consistent cash flow.
“You need cash flow to be able to keep going,” he said.
According to Ash, chasing growth could leave investors unable to shift their assets once they had reached the perceived end of a growth cycle.
He went through the struggle with a property in Western Australia, which grew from $470,000 to around $800,000, but when he looked to sell, there were no buyers.
“All of a sudden, the Perth market had gone really quiet.”
“Then you had the first-home buyers grant come in, which put lighter fuel on the market again, and now it’s gone up to another level.”
He said the pursuit of yields had pushed investors into more affordable assets, increasing competition in first-home buyer markets.
“It has really concentrated a lot of buyer’s agents, investors and first home buyers in the same markets, which is probably counter-intuitive to what they’re trying to do.”
Additionally, Ash said the government’s move to restrict investors from investing in residential assets through a self-managed super fund (SMSF) had shown little concern for people’s individual outcomes.
He said the government’s 45-day timeline had rushed the property market and forced investors to act ahead of schedule, increasing the risk of a bad decision.
“If they want to do that policy, fine. But give people a chance. All of a sudden you’ve only got 45 days,” Ash said.
Commercial properties
Additionally, Ash said that while a move into commercial assets had become more viable in the eyes of many investors, they still needed to make sure they received the right advice.
“All of a sudden, everyone’s a commercial expert, and they’re applying the same residential outlook to commercial; they’re going to buy the wrong asset, and they’re going to potentially put someone’s livelihood at risk.”
He said viewing a commercial asset the same way as a residential property could be a huge risk for investors.
“I’d be staying away from it for a couple of years, and then there’ll be an opportunity to look into the asset class. But for now it’s extremely dangerous.”
“There are so many different industry segments within commercial, but if someone doesn’t know what they’re doing, they’re going to wreck your life.”
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