What’s Happening Across Australia’s Property Markets?

Setting the Scene

Jeremy notes property data typically takes a month or two to reflect a policy change of this scale, but expects the coming months to show a clearer picture across metrics like stock on market and days on market as the proposed changes work their way through the market and eventually parliament. Over the past 12 months, Darwin and Perth have led growth among the significant urban areas, with Hobart, Brisbane, and Adelaide also posting strong results, while Canberra, Melbourne, and Sydney have lagged behind, though both hosts note pockets within every city are still performing well individually.

House Markets: The Big Picture

Sorting by DSR3, Darwin sits at the top, with Perth close behind, despite already having roughly doubled in value over the past five years. Jeremy explains Perth's market cycle timing score is now among the lowest of the capitals specifically because of how much growth has already occurred, a pattern also showing up in Brisbane and Adelaide, both up around 90–95% over five years. Jeremy reflects that these kinds of returns would have been considered exceptional even a decade ago, and cautions newer investors not to expect this pace of growth to continue indefinitely.

Asked directly whether he'd still be buying given the proposed federal tax changes, Damien confirms he recently did (with a contract signed after the 12 May announcement), while acknowledging the cash flow considerations these changes raise for a typical investor. Jeremy's view is that there's no need to rush a decision either way, waiting a couple of months to see how conditions develop is reasonable, without needing to act from a place of urgency.

Both note Sydney, Melbourne, and Canberra are starting to show early improvement in their overall DSR3 scores, even though city-wide figures still lag the national leaders, with individual pockets (Campbelltown in Sydney, and select parts of Melbourne) performing better than their city's aggregate figure suggests. Vacancy rates remain extremely tight nationally, generally under 1%.

What Tighter Rental Markets Might Mean for Renters

Jeremy shares his view that the proposed tax changes are unlikely to ease rental pressure, and may make it worse. His reasoning: established properties are more likely to be purchased by owner-occupiers rather than investors going forward, which would gradually shrink the pool of established rental stock, pushing vacancy rates lower and rents higher, until eventually properties in established areas become cash flow positive enough to draw investors back into the market, restoring balance. He notes stock on market has already picked up slightly in the weeks following the budget announcement, consistent with this expected shift.

House Markets: Monthly Value Change

Looking at the past month specifically, the market was broadly flat overall: Sydney fell around 2%, Melbourne around 2.2%, while Darwin rose around 2.4%. Both caution against reading too much into a single month's figures, and flag that this data still predates the proposed tax legislation formally passing, at the time of recording, it remained before the upper house. Even within underperforming cities, both note pockets of strength exist, reinforcing that broad city-level figures can mask meaningful variation at the suburb level (Sydney alone has around 700 suburbs, Melbourne around 500).

Houses: Stock on Market

Stock on market has picked up almost everywhere over the past month, most noticeably in Darwin, which moved from around 0.5% to 0.7%, still low in absolute terms (roughly 1% is considered a balanced market), but a meaningful proportional increase. Jeremy notes that at a more granular, suburb-specific level, elevated stock on market doesn't always mean genuine oversupply, greenfield estates in particular can show high listing numbers simply because many properties are still house-and-land packages yet to be built, meaning genuine on-the-ground supply can be tighter than the raw number suggests. He also confirms it's technically possible for a suburb's stock-on-market percentage to exceed 100% in these circumstances, since off-the-plan listings can outnumber the properties that currently exist.

Houses: Days on Market and Vacancy

Days on market rose modestly across the board, around 6% overall, with cities like Hobart moving from roughly 34 to 39 days, changes both hosts describe as noticeable but not alarming, especially against a benchmark of around 60 days being considered a more typical, balanced market. Vacancy rates remain very tight overall, and Darwin's fell further still, from around 0.6% to 0.3%.

Jeremy uses this to push back on the popular narrative that Darwin is purely an "investor-dominated" rental market. He explains that if a market were genuinely dominated by investor purchases, a batch of recent sales going largely to investors would typically push vacancy up (since most of those properties would need to be freshly listed for rent), not down, so a falling vacancy rate is more consistent with genuine tenant demand than with investor-driven oversupply. He also notes that context matters when interpreting typical value data of this kind, an investor's actual decision still needs to be filtered by their own budget and yield requirements, since the raw city-wide figures blend every price point together.

Houses: Rental Growth

Rental growth over the past 12 months has been strong nationally, led by Darwin (around 15%), followed by Hobart (around 11%) and Sydney (around 6%). Jeremy notes most people would expect rental growth to track closer to long-term inflation or capital growth averages (around 6–7%), so double-digit rental growth in some cities reflects how acute the rental shortage remains, with the possible exception of Melbourne and Adelaide.

Unit Markets: Typical Value and Yield

Turning to units, Darwin again leads, with a typical value around $430,000, notably lower than the next cheapest capital, Hobart, at around $592,000. Jeremy considers this an especially attractive entry point for yield-focused investors with a budget around $400,000, while acknowledging insurance costs in Darwin tend to run higher than other cities. Vacancy remains extremely tight there too, alongside strong market cycle timing and around 21% growth over the past year, similar to Perth and Brisbane's unit markets (around 22% and 21% respectively). Notably, unit growth in Perth and Brisbane over the past five years (112% and 101% respectively) has actually outperformed houses in those same cities over the same period.

Looking at market cycle timing specifically for units, Jeremy sees potential opportunity in Sydney, Melbourne, and Canberra, though he cautions this is only one metric among many feeding into the overall DSR3 score, and shouldn't be read in isolation. Damien notes recent algorithm refinements have shifted Melbourne's relative position somewhat as more data has been incorporated.

Unit Markets: Monthly Change and Stock

Monthly typical value changes for units were led by Perth, Brisbane, and Adelaide, with Canberra and Melbourne roughly flat, and Darwin pulling back slightly alongside Sydney and Hobart, though Damien notes this may partly reflect lower sales volume rather than a genuine shift. Stock on market lifted in most cities, with Hobart and Adelaide the exceptions, showing a slight decline. Jeremy notes the extremes in the data (a roughly 50% swing between the highest and lowest movers) can look more dramatic than they are in practice, since they're often measured off a very low base.

Unit Markets: Days on Market, Vacancy, and Rental Growth

Days on market for units lifted across most cities, consistent with the broader slowdown, aside from Darwin and Canberra, which came back slightly. Vacancy rates remain tight everywhere, particularly in the smaller Darwin unit market (around 0.4%), alongside Brisbane, Hobart, Adelaide, and Perth. Rental growth for units was positive nationally, with Darwin again the standout at around 11.7% over the past 12 months (up from 5.1% the prior year), Jeremy notes this reflects a small underlying sample size in Darwin's unit market specifically, so month-to-month figures there can move around more than in larger markets, though the 12-month trend remains the most meaningful figure to watch. He expects continued rental growth given how tight vacancy remains.

Key Takeaways

Damien's overall summary: every city has pockets of strength and weakness beneath the headline numbers, and the right approach still comes down to individual circumstances, budget, buffers, and upcoming life plans (such as a car purchase or moving home). With established house supply lifting and days on market increasing, he expects units may hold up comparatively well in the near term simply due to their more accessible price point. He points to a specific example: a two-bedroom unit in Punch Bowl, Sydney, in an older, small complex, listed under $600,000, a price point he considers extraordinary value for Sydney, particularly for buyers priced out of the $2–3 million house market, with further opportunities noted across Sydney's western corridor more broadly.