EP. 9 | Property Market Outlook 2026 - (What The Data Is Telling Us)

Parag Dixit

Hi, hi, mudit, hi, Julius, how are you good? How are you very good? Man, very good.

Mudit

Good. I'm good, yes. How things? Things are very, very interesting. Times the market, in terms of how the property and finance market have changed, it seems that the last year was different. This year seems to be a lot different from how it was last year.

Parag Dixit

So, yeah, lots, lots different, right? Yeah, and I can't even imagine how our last year went and how, you know, last year was, was like weathers, you know, summer and winter and spring, and a completely different with each other. Yes, I think that's how the last year went. And it went pretty quick. So much happened last and and we post covid. I think the one of my fastest years which went by without me noticing, was 25 or something. Things moved pretty quickly in the last year.

Julius

Monitor cycles within cycles that is, that is a bit different. And then it was bit strategic. It was Yeah,

Parag Dixit

and and people, there were so many things which have changed. I I think if I, if I look at the mood which was there in 25 with all of us, we we had a lot of varying changes, but but before we go ahead, let me just briefly talk about what we are going to talk today, what we are going to go through. We'll just have general after 25 we will discuss about what we are going to go state by state. What are the various factors which are going to influence 2026 and how the property market for 2026 looks like? What are the factors which are going to impact it? How those factors are going to impact various states in their stages? And obviously, this one podcast is going to be followed by our state of investment podcast series, which will, we'll talk about each state in depth, about what's going to happen there, what's, what are the factors, regional and the main cities and all that. But right now, we will have a very general view of what's going to happen in 26 but before we do that, I think we what we touched upon at the start 25 you know, 25 was so interesting. I think the first half of 25 was all exuberance, you know, all young and bursting with energy. You know, there's lot of rate cuts are going to come in, okay? Everything is going to suddenly fall in place, and we are going to be all fine, right, yeah, there was a lot

Mudit

of confidence, which was there from a from an investment point of view. The mood was good. Everybody was expecting, and it happened as well, right? So that the rates have been high, so the rate cuts are gonna impact everybody's financials positively. So the mood was an upswing, and that's how the entire first half of the year was. But yeah, towards the end, it was a very different story that how the rate suddenly within, within the matter of couple of weeks, the mood from the rate cuts went on to Okay. The rates are not going to get cut. They'll probably remain stable, or they can rise. And that's that started happening. So it was a very, very mixed kind of year that ways, yeah, yeah, true,

Parag Dixit

yes, right. So by the, by the by the middle of the year, we were all okay, we may not have any more rate cards. We've got three, so not much will happen, but by the end of it, oh my God, we are talking of rate rises, right?

Julius

Rate rises, yeah, I still remember when last year, January, the amount of calls we were receiving because of the positive news, yes, the rates are going to go down pretty high. Then there was a good confidence. And then property prices were also moderate, and the way it had happened. And then we had different cycles. It was bit

Parag Dixit

different, absolutely, you know, we had investors looking at creating portfolios. We had first home buyers who were looking forward to getting to their house. You know that rate higher rates were behind them, and you could look forward to, okay, I can move out of my rented place and get into my first home. And government schemes had got pre pawn because they wanted first home buyers, not super pin and buy some stuff. Maybe, I think it was too early, right? Household, the property prices rising, and that contributed a lot to the inflation and brought us to a situation where at the end of the year, we were more talking of rate rises rather than of anything else. And that's that's been, that's been a bit of a thing which happened there. But I think overall, I think overall it the market grew at a significant rate, that that was a good thing or a bad thing, I don't know, because that's what's created this bit now. But it did grow up quite, quite a lot.

Julius

Yeah. So I could see that till first half of the last year, it was a moderate growth because of the good news, okay, interest rates are going to go down and all the stuff. But when they have announced the first time buying grant, I could see the increase in the property prices was quite significant. Yeah, in dollar value, they will be very close to two to $300,000 in few markets. Wow, and that was a big impact on the property prices.

Parag Dixit

That's true. That's true that the jump in the property prices, which has happened some rightly so, some states which are following the 2024 and they were continuing with this. Wrong growth. Some states had bounced back from, from, from the depth they were in, like Victoria, WA continued, South Australia continued. NSW, besides Sydney, continue. But a lot of stuff happened in in all of these states, and that made us think through, okay, we are looking at a good, good thing. But in the end, we finished at a pretty mild rate on what's what's happened, and what what was there.

Mudit

And I think, I think that's where continuing from there, the outlook for 2026 I think it becomes important to understand that what are the factors which are now going to impact when we are going into 26 we have just started on not a very good note, RBA, dampening. All the good news there, the rates have interest rates have already started increasing. So there are multiple things happening now which are going to have a 2026 looks quite different, very different from how

Parag Dixit

2025 us? Yeah, definitely. I think inflation will be a big thing. Big play which is going to come in. I think everybody now is glued on to the TV at 230 on the day where RBA is going to announce, okay, what's going to be happening on the rate cut or the rate rise? What might I should say that? But also, not only that, I think keenly, everyone looks at what's the inflation figure, which is going to come in this year, that's going to be a big one. And because of inflation figure, how the interest rate movements are going to happen, that's going to be another pretty big one which is going to be there. I think, one more factor, which is not so spoken about, but I'm very sure, will come to the forefront this year is going to be land tax, and that's going to be spoken about a lot in this year, because that's increasing the cost for investors in particular, yes, and it's something where, because of thresholds now either being lowered or being polished or being frozen. It's impacting. Every year I hear someone giving me a call and saying, I got a land tax bill of 30 grand. What do I do with that? And and then you just you don't know what to do with so that's going to be a big factor, which is going to influence this year as well, and then obviously the big one, the expected changes to the capital gains tax. All right, I think that's a that's going to be, that's going to be a nasty one, but a lot of discussions, I'm very sure is going to happen in the next few months, about it, till June, something happens, some some bit in the media, some bit, actually in the treasury, some bit in the thing, we will see how it moves forward and what happens to that one. Yeah, and

Julius

then property prices have gained significantly, but not the yields and all of these factors, rising interest rates, land exchanges, they are impacting more towards the cash

Parag Dixit

flow of the property Absolutely, they are going to impact the investors a lot. And and investors have to be aware of what they are going to do. But let's, let's get, let's get a bit deeper into all of these things, you know, right? So What? What? What would you say if I look at inflation? Okay, now, inflation has been rising consistently for the last few months, month on month, it has been rising, and that's been, that's been a quite a bit of a, not a great news, which everyone wanted to hear. And for last four months, five months, I think whatever economists have thought that inflation is going to be, it has been more than that, yes, and that's, that's the worrisome part there is, there's something called as a trimmed mean, which the RBA looks at, and that's also increasing. And what that has brought to us is, if we have got a rate rise in February. This there's another inflation jump, which has happened in the mid month, mid Feb, inflation news, so that's impacting and there are even people talking that March may also get us a rate rise. If March we don't get a rate rise May, is very strong possibility of a rate rise. We don't know by the time we reach May, how it's going to pan up. But that's another thing which, which looks pretty this thing. And I've also heard some more economists talking of one more rate rise in this whole calendar year. So that's going to be three rate rises. And we are back to December 24 where the RBA rate was 4.35% or something. And that was, that was pretty, pretty high. So, and if I, if I look at it in the in the last 12 months, that's what's happened, right? A lot of bitters in

Mudit

the last 12 months, CPI has the consumer price index has gone up by 3.8% and housing, recreation, these have been the biggest contribution. And housing has increased by 6.8% which is, which is the bulk of where people who own a mortgage, a lot of their monthly income, part of their monthly income, is going there, so that increasing by 6.8% so housing is putting a very, very significant pressure on the core inflation itself, and house prices, like we said that last year have in a lot of places, have gone up significantly high. So that's a lot of

Julius

pressure, because last year, I think we are going back to what we had last year, with the similar interest rate. But the difference between the property prices, between last 2025 and 26 is in between 20 to 30% so according to those yields, those properties are still such. Renewable now, in a case, if suppose the interest rates are going back again, what we had in 2025 versus the amount of property prices we are on, it is going to be very tough to manage, because yields are going to be significantly dropped for the investors. Also, because of this highest interest rate, there is lot of other costs have been increased, like your insurance cost has increased. Property rates are increasing significant. Significantly in multiple areas because councils are not able to afford to keep up the places. So in Townsville, I could see their rates are increasing again. So that means all the costs related to the properties are increasing, which will have a severe impact on the property maintenance cost.

Parag Dixit

Yeah, you true. You're right. All of these costs are increasing on the on the property so and some properties are also increasing in value in itself, and that's contributing to the inflation. But we should not forget there is a large, big element of government subsidies, which is also contributed to a jump in the inflation. And that government subsidies is the most talked about bit right now, that if there was that government subsidies were managed a bit better, we could have been, not been in this situation more than housing, but, but that's that's the way it is. Governments will always work on how it is beneficial to the most people, and how it really impacts most people, and how it how it should be, and their job is to do welfare. But I think there's a time which should come. We'll say that, okay, the welfare also has to be measured, not not reckless, I suppose. Yeah, but yeah, what that is brought upon to us is the large interest rate movement which has happened. And like you rightly say, we are looking to maybe go back to the December 24 scenario where we may touch 4.35% Yeah, and that means variable rates, if, and again. See last last time where, when we had entered into a rate rise scenario, we had a lot of people on fixed rates, yes. And a lot of people were saved from the high interest rate scenario. By that time they were coming out of the fixed rates, the variable rates had started coming down. The unfortunate guys who had not fixed for four years and all those kind of terms. They were, they were, they were kind of but people who were not, they didn't really feel the impact of the high rates this time, most of the fixed rates have gone. People had not fixed any rates, and I think we were at historic low in the fixed rates versus variable rate scenario with people. And then now suddenly, everyone is exposed.

Mudit

Suddenly and suddenly, the variable rates have already started going up. The most of the banks have the day RBA announced, most of the big lenders and every all the banks passed on the rates right. Rate rise to people. Instantly, variable rates have started going up. Fixed rates, interestingly, which were which I think saw a low in the last 12 months? If I see October, November period, there was a brief period when the fixed rates had gone to a low of slightly below 5% 4.6 4.8 4.7 Yeah, but And very few people fixed during that period. It was a very brief window, and within no time, suddenly, now, the fixed rates have gone. A one year fixed rate is close to 6% two year fixed rate is in the similar range suddenly, so from early fives or high fours, suddenly up to close to 6% that's a significant jump within the last last three, four months itself in yen, you're right.

Parag Dixit

See when you see a one year fixed rate and a two year fixed rate being similar. It clearly points out to the fact that most of the banks are expecting that we are going to have a flat 2027 and which means that if you have two or three rate rises in 26 calendar year, then 27 is going to be there like the way we had our 24 I suppose, 2024 was flat, completely flat. We didn't have the rate movements at all. There were no up, no down. And December was, I suppose, the first time December. 24 was the first time where we were talking of rate cuts. But after that, this 27 looks like pretty much similar that whatever we had. The best case scenario is nothing rises. We just kind of are, are flat at a higher rate of interest, and that's going to, again, impact the investors a lot in terms of what they do and how they are going to work on this, how they're going to get into the investment cycle, or what they are going to do with their existing properties, which they are holding now. They're going to play around with it, considering, like you said, costs rising, and one of the biggest cost is land tax. Taxes. Yeah, and land tax is going to be a big one this year. Land tax is going to be an important one this year, because if you see, like NSW, they've frozen their land tax threshold, and this year will be higher land tax for the same property if you're holding it doesn't matter, even if you bought a new one or not, the same property is going to give you a higher land tax bill. So is Victoria, so is Tasi, so is a city. All these states where it is like this, we are going to have a higher Thresh, higher land tax bill to investors. Similarly in Queensland, similarly in Western Australia, we are property price. Prices have suddenly jumped up. People would not have seen the these kind of land tax coming into them, but property prices have jumped, which is nice to see when you're wanting to see your valuation, but it's not nice to see when you see that, oh, my property land has gone up and I'm going to be okay.

Julius

It has lot of impact on the land value. So in WA previously, there was no land tax because the land value is so low now, the property market have jumped significantly, and there a lot of investors who owns more than five, six properties. So in that case, yes, most of the investors are getting the land tax business. Similarly, absolutely, Melbourne is on 50,000 threshold, Tasmania, Euro land tax from day one. So yes, Land tax is the biggest component with all of this interest rate rise, all the other inflation related parameters, your council rates are rising, plus the land tax, it's going to be tough.

Mudit

And yeah, absolutely. Because the moment land tax goes up, your cost of holding the property goes up. And if your cost of holding going goes up, then you are under pressure to increase the rents as well. Right? So, right. Most people who want to hold the property for longer, they will try and increase the rents. And again, that's a again, increases the inflation, right? So it has a direct impact on a lot of people who are

Parag Dixit

renting the property, correct? And and I think, I think when we talk about states, we definitely must be covering it. But if you look at how rents are faring, they are contributing 30, 40% of persons income are going towards rent. It's already that high. So if Land tax is going to impact, and going to take the rent up further, which it's likely going to be, because investors cannot absorb the cost beyond the point it's going to start impacting. And then then people will have to, as an investor, I would have to either choose the state where I invest wisely, or I will have to see what, how do I really hold on to that property, and how do I really make sense of the investment, which I have done, but, but that's going to be, that's, that's going to be a tough and a critical one. But land Dixit part

Mudit

today this because suddenly you're everybody when they're buying an investment property, you start projecting your financial for next few years. And these are factors that you wouldn't have built in into the or how your financials will look like. Suddenly, a 30k bill or a 40k or 50k Bill can do a huge difference to how you're looking at your financials if the cash flow gets

Parag Dixit

impacted massively, absolutely right? And they've been traditional structures, which people have used to buy. You know, husband, wife would have done different structures to buy different shares, holding to buy. All that has gone for a different calculation, because now you find that you are having a land tax bill which is coming through, is going to be tough one. And I think the worst news, if it comes through for investors in this year would be, if the cup coming changes to the capital gains tax millions, that's going to be a big, big, big impact. That's a big news which is going to come in because the impact on an investor is going to be massive in this year. And I'm just going by the grapevine, which is coming through in the need media. So we're talking of bringing the discount down to 33% from 50% today. And it's not just a 17% drop, it's a substantial increase on the tax if you, if you make money on a particular property, and it's going to really, really impact, you see, and I've seen people who've been making kind of calculations on what to do, and how do I do that? But more importantly, whenever I when I'm talking to investors who are looking at and hearing this news, one thing which they are more and more certain of is that, okay, I maybe will hold the property longer, because I will maybe increase the rent and I will hold it because I can, I will be able to afford to hold it. But what it will do is it will bring the inventory down further. And if that happens, it's going to be back to square

Mudit

one, which is already a problem in a lot of places, inventory is already very low, which is putting the pressure on the supply demand gap. And that has been a reason why property prices have gone up in a lot of places. So investors, they holding longer. That puts a lot more pressure in those areas.

Julius

Yeah, at this stage, we are sitting at lowest in multiple states. And then if you look at the forecasting engine as well, the forecast is still 2035 to 36 most of the states will not have, or gonna create, divide more land, which is going to be in a mainstream so the land is not coming up. Construction cost has been risen. They're not availability of enough trades. Plus, if we getting a more land tax, more capital gains kind of tax, and then people are going to hold the properties, it is resulting in inventory dropping then. Plus, there is more pressure on the rentals. Because, yes, there is good amount of immigration, lot of people coming into country. They need houses. Not enough houses for the rental so it is like all the impacts are coming together. And it's like the big impact on the property market in the positive side, absolutely right. So speaking,

Parag Dixit

speaking of the calculation of land, of capital gains tax, I was reading somewhere that if you just on 100k profit, if you made 100k profit on. Particular property. If you as an investor, you've sold that one. And if you are going to get whatever, net of all your cost, 100k is the cost. And even if you were at a 30% tax bracket, your expected capital gains tax on just the 100k profit will increase by about four or 1000 bucks. And if you're looking at about under 37% tax bracket, if someone's there, we are looking at a cost increase of about six, six and a half 1000. And that grows up if it's 44 5% which is your highest tax bracket, if you're sitting there, then you're looking at about seven, seven and a half $1,000 of tax increase per $100,000 and that's massive, yeah, that's not small. That's a lot of money which comes through. And if you, that means, if you, if you've done well, and if you invested well, and if you understood well, you've read well, and you've got a half a million dollar of profit, and God forbid, if you're at a 50% tax bracket, kind of a scenario, obviously you're earning, well, that's good for you, but then you're talking of good 30, 40,000 Yeah, of $40,000 of which is, which is a lot of tax to pay, and that's going to be a massive impact on people when they are going to do that. So that's a big that's going to be a big one if it comes through about to people about what, what will happen to them once, if the capital gains tax bid comes through to us to work on?

Julius

Yeah, yeah.

Mudit

So I think absolutely right. I think these factors, inflation, interest rate, capital gains tax, land tax, all these are the large, broad policy and economic indicators which are going to impact broadly. I think the other thing we need, we should talk about is that, how each state or the capital cities, how the market looks like, how it was, and what is how it how does it look like in the in the coming year? These factors how they are going to impact locally, the markets, because different states are in different positions when it comes to supply, demand, the ratio and how the pipeline of supply is, how the demand has been going up, the difference between houses units and how they have grown in the last year versus what looks in the in the coming few months.

Parag Dixit

Absolutely right. No, I think, I think the impact on state wise is a good way of taking it and trying to understand, on a macro, on a larger, on a broader level of what it's going to be. But maybe I would suggest that we do it. We do the main capital cities separately, and to at least the Sydney and Aya Brisbane, which are the leaders. And then we will try and discuss the other states one by one. But let's say Sydney. So we are all sitting here. So what do you what? I think, I think the last year, houses grew pretty well, about six

Julius

six to 7% go versus units are around two to two and half percent. Yeah, so Sydney is historically very low on supply. The biggest issue in Sydney is even look at the affordability sections. Buying and renting. Affordability always have an issue. So for the buying, most of the owner occupiers or investors are paying around 40 to 45% of the income because property prices are so high, and then renting affordability is very close to around 35 to 36% so I was I was looking in a market, and I was studying few markets towards the Western Sydney as well as towards the parameter region. What I could see is basically rentals are rising. There is enough pressure on rentals because they are limited vacancies. But the properties which are up to 1.5 million have a good demand because there is good affordability between those ranges. But the property prices between 1.5 to 2 million are moving slowly, and then above 2 million is out of the affordability. That means renting in Sydney is much cheaper than buying a property

Parag Dixit

in Sydney. Yeah, that's a good factor to put in. I think rent wise, I contribute about 35% of my salary, of my or my income towards towards the rate, whereas, if I'm on if I'm purchasing a property Sydney says I'm contributing about 45% of my income towards the mortgage to mortgage repayments, that's a big thing. So rent is easier, and that's why rental returns but property prices are so high, rental returns on units are pretty low. And that's, that's, I think, contributing to the fact that more than 2 million kind of property segments is bit frozen right now. It's not, it's not moving anywhere. It's a bit stagnant there. It's tough for people to afford to buy, everyone to be afford to buy there. So one and a half mil, I think that's bread and butter here. That's like, everyone wants to be there, yeah. And not above that.

Mudit

And that's going to be, yeah. In fact, last year, post September, October, last year, the properties which were especially in the range of one to one half mill they saw a jump because of the first home buyer scheme in Sydney itself. Yeah, because the threshold was increased from 900k to $1.5 million yeah. So the movement was there. But going forward, like we're saying this year, it it's given the affordability Sydney's house prices, property prices, and for. More and more, especially like investors, investing in Sydney has become very difficult to a lot of investors. That's why I'm looking at outside Sydney, because the rental yields becomes a huge challenge here, and that's what most likely in 26 if the interest rate pressures continues, which is likely. So it's going to be a tough market.

Julius

Well, I agree on that. So when we look at the below 1.5 millions market. I was looking at data points and the suburbs like St Mary's, st clays towards that belt. From last three years, property prices were rising silently, and they've grown to 40% so whatever is below 1.5 million had a good jump, even though the rentals was around 4% and now they have dropped to around 3.8% but in that segment, from 900,000 till 1.4 million, we still had a strong rental demand. But now what we could see is these prices are touching 1.5 million because that price get have a lot of demand, and that had created more pressure, true,

Parag Dixit

and that's that pressure is coming to to the front right now. And I think 2026 is a year where Sydney not that it will be crashing. It will it will be frozen. It just will be frozen on time. You know, sellers, they they will not want to reduce their expectation. They'll be there where they want to. These buyers cannot stretch any further because interest rates are high and I can't borrow more. It's going to be a bit flattish flat in terms of purchasing of properties, pretty flattish kind of a market this year. You know, there's a ceiling there. People just can't go beyond it. And even if you can, you need you can't stop living. You need to you need to eat. You need to enjoy. You need to have some bites as well. I think rate cuts Sydney would be the most impacted by that. If rate cuts start coming in, that will give a meaningful upside to Sydney. But before rate cards come in, it's going to be a it's going to be tough, and especially the upper part of it, three, 4 million and plus, kind of segment that will have a lot of movement, not, not, not normal movement. Maybe I have a much more abnormal movement in the price range.

Julius

But rental will have good outlook, because lot of people, those who couldn't buy or they would like to buy, can't buy because of the interest rates or the affordability or the borrowing capacity shortages, and then there'll be more rental demand. So at this stage, vacancies are low, not lot of properties are coming into market because builders not afford to build, or the property prices are so expensive they are not able to sell so very low vacancies for the properties, and because of that rental demand, we could see there will be a significant amount of the rental rises in Sydney. Yeah, that's right.

Parag Dixit

Yeah, that's right. In fact, units are giving more positive increases in Sydney, and more and more units are coming into the market. I think Bill to rent is also going to be a good factor in Sydney, when the way it comes through, because build to rent, will still give a good four, four and a half percent rental yields to to the to the conglomerates which are going to manufacture that. And that's going to be an important one.

Mudit

I think, I think that's right. And if I were to look at the two separate segments, one is houses, and one is units. Houses are becoming more and more unaffordable. Units are relatively affordable. But the problem is, in Sydney, we have not seen the unit prices grow up, go up, right? So the units have not gone up, and a lot of people do not want to buy units because of that reason. So house is unaffordable. Units not going up in value. And that is why, I think a lot of people in Sydney, especially who are into, let's say, first time buyers. For them, it has become like, Okay, this is not good. This is not something I can afford. Then should I continue on rent vesting? And that's the model probably in Sydney that will become more and more

Parag Dixit

popular, yeah. What do you do? You know, houses are unaffordable. Units are not rising, not rising. Renting is tight, and it's pretty tight, and people still can't get the rental properties where they want. So it's a it's a bit of a tricky situation in Sydney, correct?

Julius

And there'll be another reason for rent units to not to grow because of these supply issue. So lot of projects, which was told during covid, most of that supply will come into the mainstream. So between next two to three years, there will be inventory increment of around three to four months that will go up to around nine to 10 months of inventory in Sydney on the United market. So unit front, we are getting more inventory. That's supply of units are pretty high. That's why it is not giving that pressure. It is not creating enough demand to property prices to go up, even though you still have a rental demand. So unit market will be little slow in Sydney.

Parag Dixit

That's right. Virat, I think recent NSW is different. Recent LSW has been a bit different from there. Houses have risen faster than even Sydney has because obviously they have a different price point. They deal in about, I think 840 is all. It's the million price. And they have been better. Units have also fared better in the regional and, oh my, I think more than regional. I think rest of NSW, including Gold Coast and including South Coast, and including Newcastle and beyond and interiors. Get resurrection all that, yeah. So not Gold Coast. So all of this bit, all of these whole thing, has formed in a much different way, much, much better units have formed better things along the coast have done pretty nice. Coastal LGAs are doing really, really well in, in Sydney, in, sorry, in the other part of NSW.

Julius

Yeah, that's right. So when we look at the regional NSW perspective, every council in regional NSW performed at least 15 to 20% in few segment, not in every segment. It depends on the segmentation of the pricing also. So for an example, if you go towards double, double is rising too fast because of multiple economical projects. There are few billion dollar projects. Albury, amazing. It grew now. Albury, surrounding has lot of pressure. Regions were growing because of the two reasons. Number one is basically extremely low. Supply yields were very close to 5% five to 5.5% and there is enough net internal migration from your main cities towards the regional town center, like when you look at the Central Coast. Central coast as a statistical area for residue councils, wayang and scotsford towards the Tuga Lake, we could see the property prices have moved in between. In from last year in dollar value around 150 to $200,000 we were looking at the properties in Hamlin terrace towards waranga, basically. So over there, the property prices have jumped significantly in that market. Basically, there is lot of owner occupied demand also. Plus Central Coast is easily commutable from to Sydney, because you have a good train network. Other than that, when you look at the other regional significant urban areas like wakabaga or Tamworth region, we could see a significant amount of property price movement because of the fact that lower supply, higher demand, low inventory, good yields, good economical outlook, absolutely.

Parag Dixit

And and all of these areas, and NSW, I think, has been one of the best in terms of vacancy rates. Yes, vacancy rates have traditionally been lower in the last year, and they've always been good. It's, it's a tight rental demand situation, which is out there, and which is what has made it, made it better for investors, and that's why investors have wanted to invest there. And but obviously it is now reaching a point where we it's becoming a bit tighter for expensive for the local, local economies to be there. But I think that if the income doesn't follow, they'll have a cap in this year. But 2026 I think 2026 you know, the other part of NSW is more of like, you know, it's the escape from Sydney. This the high cost Sydney, and the bustling Sydney, you kind of escape from there. It's still it's still working out. It's still working for people. But I think the gap is narrowing down. The discount which people were having on the prices is narrowing down. Quite marries what's happening in the Sydney area and the similarly, South Coast, and quite marries that some parts are even more expensive than Sydney, and I think the purchase outlook is going to be similar. I think this is going to be a good four to 6% price increase, which will still happen in 26 in the in besides Sydney, kind of a scenario in NSW, right? Yeah, the places

Julius

which are commutable to Sydney still follow one and a half million dollars mark. And that's the pressure they're gonna witness, because of the owner occupied demand as well, because a lot of moving out of Sydney and moving to that side, when we go towards further towards the hunter, or towards the Albury Council, or towards the Albury surrounding a double property, prices are still well below 650 K Yeah, and the yields are still around four and a half to 5% so there's still a bit margin to go up. So affordability will be the driving factor in those regions, absolutely right?

Parag Dixit

And that's what's causing the momentum coming in those regions. That's what's causing the momentum along the coast as well. So there is an under supply, which is going to keep on, keeping having the purchase demand moving across in all these areas. And that's going to keep on driving the purchase in the 2000 in the whole Yeah,

Mudit

I think that that was 2026, rest of NSW seems more promising in terms of growth and given the supply constraints and affordability still in a lot of areas. But of course, it depends on the pocket. It is not a rule that you can apply for the remaining NSW, but there will be pockets which are expected to do decently well in this, in this

Parag Dixit

coming year, correct? And even rental demands are going to be pretty tight this year, you know, yeah, houses will still continue to be 4% plus, you know, units will still have four and a half odd percent plus or something, which is going with there. So it's going to be still, obviously, at these kind of rates, they it may be, still be a bit cash flow negative, but it's still one of the best rentals you can get in NSW and NSW, by by nature of it commands people with better incomes and better income ranges. So so it's affordable for people, and that's why the rest of NSW is going to be a strong focus market in the year 26 where I think investor demand and. Own occupied demand going to be equally balanced and will still impact people to to make it as a choice area where they would want to live in and where they even outgoings

Julius

are less in NSW, so you don't have more council rates, you don't have more insurance. Insurance is moderate plus. When you look at the unit market in NSW, it has a different perspective, because when you go towards little regional towards the regional towards the rest of the NSW, there is a significant difference between the housing prices and the unit market. So when you look at the segmentation in the pricing between the housing and the units, if it is more than 50 to 60% then you could witness that pressure, and NSW still command that. That's why unit will have lot of

Parag Dixit

pressure this year. Yeah, absolutely right, absolutely right. And that's it's good for the other rest of NSW, which is, I think I'm pretty confident that that's going to be a big focus for investors in this coming year. Or again, another big, big, big focus for investors, I think will be Perth in WA and we're going to the other course, right? Completely other course, that's going to be a huge one. I think 25 was massive for Perth and WA in particular. But Perth, obviously, that's the largest one. So huge. 15% plus in the houses, 17% plus with the units, in terms of the price growth, which is

Mudit

phenomenal, which I think in the last five years, WA market has grown by almost 90% in terms of property values. And today, Perth is the average house price. Median House Price is touching almost a million dollars there. Now. Yeah, absolutely, that is, that is for, for for a lot. For a decade, there was a movement. And in the last four years, I've seen huge growth. So last year has been, has been a continuation of that growth, which we have been seeing in Perth,

Parag Dixit

absolutely right? I think 90% growth in the last five years. That's what the statistics I was reading at some point of time, a few days ago, about about WA and that's a huge growth. And you're talking of close to 20% return annually for the last five years, obviously, some part of it in chunks, and some part of it slower, but it's a phenomenal increase. I think, the best market overall in the last five years, and it's been very good 2025. Has been one of the best years for WA as well, and even in renting as well, right? Rental Affordability has been phenomenal. Rental growth has been phenomenal. Regional WA, rents have grown by more than 10% unit yields still hold strong at more than 5% which is the best for one of the capital cities. Right? 5% in Perth is a huge rent.

Mudit

I think the balance of capital growth and cash flow the rental yield Perth has been one of the best markets so far, and 25 would continue to do so, yeah.

Parag Dixit

And it also, despite all this, the rental supply is pretty low, very low. It's a very constrained market. You still have those pictures of 40 people standing in the queue to get a place to rent, but still get a good, decent place to rent. That's why I think 1% odd is the vacancy rate there, and which is which is so low in Perth. And this is so phenomenal. Now yields are still around 4.8

Julius

to 5.2% at this price guide. First half of 2025 bit, okay. Second of two of 2025 when the investor realized that, yes, that's only market where you could get a very good capital growth, because even though the percentage growth was bit okay, but still, the dollar value was around $600,000 you could afford properties in in suburb, like probably for an example, which is 15 kilometer to city with 800 square meter lot for $600,000 and the rental was around five and a half percent. And that's the time when there are lot of investors come back to Perth again, and when we could see a significant amount of pressure on the property prices, even though, historically, the Perth was running low on inventory, extremely low supply, very high demand. Then the after the first time buying scheme, all the suburbs which are owner occupiers, preferred suburb, like, when you go towards the swan council or towards inner CBD, like suburb like well Lord or birthram or canning well Piera water, Harrisdale, till mid last year, they were sitting at very close to 750, to 800 ish like Harrisdale and PR waters, they are they're cruising around 1.1 million now. And when you look at the rentals, they're crossing around $1,000 a week. Yeah. So extremely low supply, high demand, and then extremely high owner occupied demand have made lot of impact on the property prices in WA, and it is still continuing.

Parag Dixit

The more said about Perth, the lesser it is. But I think still, despite what we say, Perth still is, I think where Sydney was in 2015 that's that's where the prices sit. So I don't know if it marries and reaches where Sydney is today. What's going to happen to the Perth market, but that's where it is. That's a large gap from Sydney, what it is and and the the demand and the under supply is a massive story for Perth, and we still are going to see. See that under supply is going to continue in 2026 if you're looking at purchasing a property, it's a it's a strong capital gain market for 26 as well, with with, I think across the state, demand going to be pretty much equal, pretty much responsive to how it is going to be there rate cuts. The more the rate cuts, the better that economy is going to become, and better that value of properties and holding the property is going to become. If there was a sqm search research which we were reading, obviously, now we have rate hikes coming. But they said that if rate hikes would not have come in 26 it could have grown by eight to 12% and the rate hikes come, obviously, the scenario. Now we're still looking at a three to 5% increase in the property prices in this year, despite whatever expensive it becomes in terms of holding cost. That's a strong statement for a stage it's continuing for last two, three years.