Understanding the Current Property Market
Terry Ryder recently highlighted some powerful and insightful truths about the Australian Property Market when he stated “government policies actually inflate prices, not help affordability; there’s a chronic housing shortage; and property values are continuing to rise in every capital city and regional area despite economic predictions.”
Government Policies and Their Impact on Property Prices
Politicians talk about “affordability,” but their policies say otherwise
While politicians regularly promise to “fix housing affordability,” the reality is very different. In fact, as property analyst and Hotspotting founder Terry Ryder explains in his new book “Why Property Values Rise,” the decisions being made in Canberra and our state capitals are actually fueling property price growth certainly not slowing it.
That means one thing for investors: property values are likely to keep rising.
The uncomfortable truth – governments depend on high property values
According to Ryder, there are three key reasons politicians need prices to keep rising:
- Personal interest: Many political leaders own investment properties themselves.
- Voter satisfaction: Two-thirds of Australian households own their home and they’re happier when property values rise.
- Revenue addiction: Governments collect more than $100 billion a year from the property industry through stamp duty, land tax, and capital gains taxes. Rising property values mean a bigger “hit” of revenue, which is something politicians won’t give up easily.
So, while public statements may focus on “affordability,” the real policy direction keeps pushing prices up.
Shortage, demand, and the illusion of help
Every new “housing affordability” policy whether from low-deposit home loans to first-home buyer grants simply fuels extra demand in an already under-supplied market. With building approvals at 12-month lows and the government’s promise of 1.2 million new homes falling far short, the imbalance between supply and demand is widening every month.
Meanwhile, population growth through overseas migration is soaring. Sydney and Melbourne inner suburbs continue to lose people to more affordable regions, yet overall population still grows, placing further pressure on rental and housing supply.
Why investors are the winners in this environment
While these conditions are tough for first-home buyers, they’re a golden window for investors.
- Rental vacancy rates are at record lows across Australia with no sign of improving, in fact the opposite – just look at the incredibly long lines of want to be tenants at open for inspections.
- Rents are rising sharply, boosting yields for you the investor.
- Capital values are increasing in every capital city and regional market giving you the investor a sound opportunity of healthy capital growth.
For those positioned correctly, the combination of limited supply, high demand, and government-fueled value growth makes property a powerful wealth-building vehicle — despite (and in some ways because of) political talk about affordability.
The myth of “prime suburb” growth
Ryder also debunks another long-standing myth which is that the best capital growth comes from expensive, inner-city suburbs. Recent years have proven the opposite.
Some of Australia’s best-performing markets have been diverse regional areas with strong local economies and lifestyle appeal — places that continue to attract both residents and investors seeking affordability and growth potential.
This movement, which Ryder calls the “Exodus to Affordable Lifestyle,” began long before COVID and continues today.
Many investors overlook an important point: rental yield as a percentage of property value is often much lower for expensive homes. In contrast, regional areas typically offer lower entry prices and higher rental yields, meaning your money is working harder for you from day one.
Remember, property is first and foremost an investment vehicle. Keeping emotion aside, it’s crucial to focus on the numbers that underpin your investment. Over time, owning two moderately priced properties with higher yields can generate significantly greater returns than a single high-value property with a lower yield. This strategy doesn’t just enhance your cash flow today — it can meaningfully impact your long-term financial future and support your generational wealth planning.
The bottom line: those who act while others debate always have more
While governments debate affordability, the market is already moving. Prices are rising across every capital city and state, and supply pipelines are shrinking.
If you’ve been waiting for the “right time” to invest, it may already be here. The next few years are likely to see continued upward pressure on both rents and property values — particularly in affordable growth regions where demand remains strongest.
Supply is unable to keep up with ever growing demand for both homes to own or rent and is highly unlikely to narrow the gap between supply and demand for years to come. Just look at how dwelling approvals continue to drop at a critical time when the opposite should be occurring, whilst keeping in mind the heavily discussed mass migration and immigration into Australia.
First Home Guarantee Scheme 2025
The Immigration Influence on Australian Property Prices and Rental Yields
Victoria Property Market Poised for Major Revival
Brisbane and South East Queensland poised for continued growth and strong rental yields
