1. Market Update
Australia’s residential property market continues to strengthen. September recorded the eighth consecutive monthly risein national home values, with prices climbing 0.8% — the sharpest increase in almost a year. The national median home value now sits at $857,280, with Darwin, Perth, and Brisbane leading monthly growth.
At the same time, the federal government’s expanded Home Guarantee Scheme, effective 1 October 2025, is injecting new demand into the market. With higher price caps and the ability to purchase with just a 5% deposit, first-home buyers are re-entering the competition — particularly in Sydney, Brisbane, and Adelaide.
Source: Cotality
2. Implications for Investors
As a specialist property investment advisor and buyer’s agent, Sapio Insights sees several key opportunities and risks for investors:
- Demand Acceleration:
Entry-level and mid-tier segments (typically $700k–$1.3m) will see heightened competition from newly eligible first-home buyers. This underpins capital growth prospects for well-located investment properties. - Rental Market Tightness:
With ongoing undersupply and Sydney’s median rent now at $801 per week, investors can expect continued upward pressure on yields. Properties positioned in growth corridors and near infrastructure nodes will benefit most. - Policy-Driven Tailwinds:
Treasury projects modest uplift (+0.5% over six years), but private forecasts point to up to 10% growth in the first year alone. Sapio Insights aligns closer to the higher view, given the combination of rate cuts, wage growth, and chronic supply shortages.
3. Risks to Manage
- Debt Exposure: First-home buyers are entering with 95% LVR loans, lifting systemic household debt. Investors should ensure buffered cash flows against future interest rate movements.
- Affordability Limits: While high-income buyers are boosted, average income households remain priced out — reinforcing the need for selective, strategy-led acquisitions.
4. Sapio Insights Recommendation
In this environment, strategic investment selection is critical. At Sapio Insights, we advise clients to:
- Target high-demand suburbs where first-home buyer activity will intensify competition.
- Focus on rental resilience — properties with strong tenant appeal and value-add potential.
- Move early — the next 12–18 months present a unique window for investors to capture both capital growth and rental upside before affordability pressures plateau demand.
