Welcome to the first episode of the inSynergy Property Wealth podcast.
In the inaugural episode, host Rob Palmer speaks with inSynergy founder and CEO Richard Sheppard and Chief Economist Dr Kevin Hoang. Together, they explore the Australian property market outlook for 2026, the forces influencing property prices and the cities presenting potentially stronger investment fundamentals.
Their central message is clear: successful property investment should be based on evidence, market cycles and a carefully considered strategy.
Australian Property Market Outlook 2026: Where to Invest Next and Why
Why Australian property markets perform differently
Property investors often hear that they should buy near schools, transport, employment center’s or the beach. These characteristics can influence the appeal of an individual property, but they do not fully explain why one city or region may outperform another.
Richard Sheppard argues that investors must first understand the broader market cycle.
Australian cities can be at completely different stages of their cycles. One market may experience several years of strong capital growth while another remains relatively flat. When the first market becomes expensive and produces a low rental yield, demand may shift towards a more affordable location.
This is why historical performance alone is not enough. Buying in a city simply because it has recently recorded strong growth could mean entering near the top of its cycle.
A stronger property investment strategy asks a forward-looking question:
What is likely to create the greatest change in this market over the next five to seven years?
Three indicators every property investor should understand
Dr Kevin Hoang identifies three core indicators for assessing an Australian property market.
1. Affordability
When the price difference between two cities becomes unusually large, buyers may move towards the more affordable market. This migration can increase housing demand, stimulate construction and support capital growth. Relative affordability is therefore often more useful than looking at a city’s median price in isolation.
2. Rental yield
Rental yield shows how much income a property generates relative to its value. A stronger yield can reduce an investor’s holding costs and indicate that buying is becoming more competitive with renting. Conversely, an expensive market with a very low yield may require substantial ongoing cash contributions.
3. Vacancy rate
The vacancy rate measures the proportion of rental properties currently available.
A very low vacancy rate can signal that housing supply is failing to meet demand. This may place upward pressure on rents and make a market more attractive to investors however the quality, location and price of the individual property remain critical.
These indicators should also be considered alongside population growth, infrastructure investment, employment, construction activity and long-term supply constraints.
How tax changes could affect investors and renters
Richard and Kevin examine the proposed property tax changes announced in the 2026 Federal Budget, including their potential effects on negative gearing and capital gains tax concessions.
Reducing tax benefits for established investment properties could discourage some investors from purchasing them. If the number of rental properties falls while demand continues to grow, rents may rise more rapidly.
Richard emphasises that negative gearing should not be treated as an investment objective, especially when the government announced that negative gearing would not apply to properties purchased after 1 July 2027. A tax deduction may reduce the cost of holding a property, but the investor is still making a financial contribution.
The more meaningful measure is the property’s potential total return, which should include capital growth, rental income, tax considerations, costs of buying and selling, financial expenses and ongoing holding costs.
Australian capital-city property forecasts
Darwin: strong demand and limited supply
Dr Kev identifies Darwin as the capital city with some of Australia’s strongest underlying property fundamentals highlighting Darwin’s exceptionally low vacancy rate, comparatively high rental yields, limited new housing supply and substantial infrastructure investment relative to Darwin’s population which is smaller than Sydney, Melbourne, Brisbane and mid-sized capitals.
Brisbane: infrastructure and the 2032 Olympics
Brisbane continues to attract attention from Australian property investors due to interstate migration, housing demand and preparations for the 2032 Olympic and Paralympic Games.
Major infrastructure spending may support employment and economic activity in the years leading up to the event. Brisbane also remains more affordable than Sydney in many areas, although its recent growth means investors must remain increasingly selective.
Dr. Kev suggests townhouses and units may offer stronger yields and better affordability than houses in select Brisbane locations.
Perth: population growth meets housing pressure
Perth has been a popular option for the past few years due to the combination of population growth, relatively affordable property, low vacancy rates and significant infrastructure activity.
Strong migration has increased the demand for housing, while construction has struggled to eliminate the existing shortage. This imbalance may continue to support growing rental yields and property values.
Investors must still consider Perth’s exposure to economic and commodity cycles rather than assuming recent performance will continue across every suburb.
Adelaide: constrained supply and long-term projects
Adelaide’s geography can make outward expansion more difficult, helping to constrain the supply of new housing.
The city may also benefit from long-term defense and infrastructure projects that generate employment and attract workers. Although its recent growth has reduced affordability, Adelaide remains less expensive than Sydney across many market segments.
The strongest opportunities are likely to depend on local supply, rental demand and access to employment rather than broad citywide growth.
Sydney: affordability remains a major obstacle
Sydney’s high property prices and comparatively low rental yields create challenging conditions for investors.
When mortgage repayments greatly exceed the cost of renting, fewer renters can transition into home ownership. Investors may also face substantial holding costs, particularly when purchasing houses in expensive areas.
Sydney remains a globally significant city with long-term appeal, but the podcast argues that its current position in the property cycle may offer less attractive risk-adjusted returns than more affordable markets.
Melbourne: population growth offset by supply
Melbourne continues to experience strong population growth, but it also has more land and a larger pipeline of new housing than several other capital cities leading to a decrease in pricing over the past 3 months.
That additional supply can absorb demand and reduce pressure on property prices. As a result, the episode presents a subdued short-term outlook for Melbourne despite its economic scale and long-term strengths.
Hobart: recent growth needs stronger foundations
Hobart has experienced periods of considerable property growth, but its smaller population, limited infrastructure spending and lower population growth may restrict future performance.
Recent price movements should therefore be assessed against the city’s longer-term demand drivers.
Interest rates, inflation and rental growth
Interest rates remain one of the most important influences on the Australian property market.
Higher rates reduce borrowing capacity and increase mortgage repayments, which can slow buyer demand. At the same time, housing shortages and rising construction costs can keep rents elevated.
Dr Hoang expects interest rates to move towards a more stable long-term level as inflation moderates, although short-term movements remain difficult to predict.
Investors should ensure their strategy can withstand changing interest rates rather than relying on an immediate rate reduction.
What should property investors do in 2026?
Investors should not just blindly rush into whichever city recently achieved the highest growth.
Instead, investors should:
- Establish clear financial and lifestyle goals.
- Review borrowing capacity and cash-flow requirements.
- Compare markets using long-term evidence.
- Consider affordability, rental yield and vacancy rates.
- Investigate population, employment and housing supply.
- Select the right property type within the chosen market.
- Stress-test the investment against higher costs or weaker growth.
- Seek advice that considers the entire portfolio.
A strong market cannot compensate for an unsuitable property, excessive debt or poor financial structuring.
Build a property strategy based on evidence
The Australian property market in 2026 contains both opportunities and risks. The strongest results will come from understanding market cycles, analysing reliable data and selecting investments suited to a clear financial plan.
Review Your Portfolio Strategy & Get Started
Ready to start your property portfolio or want to understand how the recent Federal tax changes and evolving market may impact your portfolio or future investment plans?
Speak with the team at inSynergy Property Wealth Advisory.
Book in your free 60-minute consultation.