For many property investors, 2025 delivered favourable conditions. Interest rates were reduced three times, property prices rose across many markets, and rental demand remained strong nationwide. Tight housing supply and government incentives also helped support activity.
While February’s cash rate increase signals a shift in the rate cycle, the outlook for property investment remains broadly positive. However, market conditions are likely to vary across locations and property types.
Below are several trends expected to shape property investment in 2026.
Price growth likely to vary by location
National home values are widely expected to continue rising, although growth is unlikely to occur evenly across the country.
According to Cotality’s Decoding 2026 report, 87% of real estate agents and finance professionals expect dwelling values to increase over the coming year, while only 3.5% anticipate prices declining.
Markets such as Western Australia, Queensland and South Australia remain among the most optimistic, supported by strong population growth and ongoing housing supply constraints. Cities including Perth, Adelaide and Brisbane are widely expected to continue outperforming Sydney and Melbourne, where price momentum softened towards the end of 2025.
For investors, this highlights the importance of understanding local market conditions rather than relying solely on national trends.
Demand growing for dual-occupancy properties
Properties that support multi-generational living are expected to remain in strong demand.
As both housing prices and rents continue to rise, more families are choosing to share accommodation to reduce living costs. This has increased interest in properties that provide flexible living arrangements, such as homes with granny flats, duplexes, or properties with a separate studio or secondary dwelling.
From an investment perspective, dual-occupancy properties can offer several potential advantages. They may generate higher rental income, greater flexibility and reduced risk.
Regional markets remain on investors’ radar
Regional property markets are also likely to attract continued attention from investors seeking affordability and rental yield.
Compared with capital cities, many regional areas still offer lower entry prices and the opportunity to diversify a portfolio geographically. Demand has also been supported by lifestyle migration and the continuation of flexible working arrangements for some employees.
In 2025, regional dwelling values increased by 9.7%, compared with 8.2% across the combined capital cities. Western Australia recorded the strongest regional growth at 16.1%, followed by regional Queensland at 12.6%. Regional Victoria experienced more moderate growth of around 6%.
While regional markets can offer attractive opportunities, local economic conditions and supply levels remain important considerations.
Energy efficiency becoming a key feature
Energy efficiency is increasingly influencing both buyer and tenant preferences.
Features such as solar panels, battery storage, electric vehicle charging infrastructure, quality insulation and smart energy management systems are becoming more common in newer homes and renovations. These features can help reduce running costs for tenants and improve a property’s long-term appeal.
As energy costs and sustainability considerations continue to gain attention, properties with these features may become more competitive within the rental market.
Rentvesting continuing to grow
Rentvesting is also expected to remain a common strategy, particularly among younger buyers navigating affordability challenges in major cities.
This approach involves renting in a location that suits lifestyle needs while purchasing an investment property in a more affordable market. For some buyers, rentvesting provides a pathway into property ownership without needing to compromise on where they live.
A market that still rewards informed decisions
While interest rate movements and affordability pressures will continue to influence the property market, opportunities remain for investors who take a well-considered approach.
Understanding market trends, local conditions and financing structures will remain key to building a resilient investment strategy over the long term.
If you’re considering purchasing an investment property in 2026, the team at Ironbark Group can help you assess your options, understand your borrowing capacity and structure finance that supports your broader investment goals.