Where is the Property Market Heading? Key Takeaways from Our Latest Mentor Workshop 

If there’s one thing we know about the property market, it’s that it’s about as predictable as a Melbourne weather forecast—mostly uncertain, often surprising, and occasionally a little chaotic. 

As part of our MFAA-Endorsed Mentor Program, our recent Mentor Workshop, with industry experts, including Matt Ivers from Vision Property Investment and Maree Kilroy from Oxford Economics, discussed the state of the property market, interest rates, supply shortages, and where investors might want to keep their eyes peeled. 

Here were some of the takeaways.

1. Interest Rates: Will They, Won’t They? (Spoiler: Maybe May onward?) 

Ah, the golden question: when might interest rates finally drop? 

According to Maree, the latest inflation data suggests we’re close to the Reserve Bank of Australia’s (RBA) target range, but a rate cut in February? Maybe not. Whilst some majors are leaning to a February interest rate cut, plenty are betting on May for the first rate cut, with a potential 100 basis point reduction over this cycle. 

Why the delay? 

• Some subsidies keeping household costs down will soon expire, pushing inflation up. 
• Retail spending has picked up, so consumers might not need relief just yet. 
• The RBA doesn’t want to pull the trigger too soon and then regret it. 

Takeaway? If you’re holding your breath for a February rate cut, you might want to exhale and hold tight for a few more months. 

2. Investors Are Sitting on the Sidelines… For Now 

Investor activity in the property market has softened. Why? 

• Uncertainty around rates. 
• Rental yields under pressure. 
• Higher land taxes (e.g., Melbourne). 

This is unlikely to last long. As interest rates drop, borrowing power increases, and we could see an increase in investor activity in the property market—especially in undervalued markets. 

3. The Housing Shortage: It’s Not Going Away Anytime Soon 

Yes, there is a housing shortage in the Australian property market. And no, it won’t be fixed overnight. 

What’s driving the supply crunch? 

• Construction is slower than ever thanks to rising costs and a shortage of tradies. 
• Population growth (particularly through migration) is outpacing new builds. 
• Government policies aren’t exactly speeding up development. 

According to Matt Ivers and Maree Kilroy, even if the government had the perfect plan right now, we may not see meaningful change for another 5-10 years. 

Takeaway? If you own property, you’re likely in a strong position.  

4. Where Are Property Prices Heading? 

Melbourne and Canberra have already seen price corrections. Sydney is starting to show signs of cooling, especially in the top-end property market. 

But will we see a major price drop? Probably not. 

Why? 

• The housing shortage will put a floor under price declines. 
• Once interest rates drop, buyer confidence will return. 
• Investors are likely to come back into the market in late 2025–2026. 

Takeaway? In other words, we might see a slight dip in some markets, but unlikely to be significant. 

5. Where Should Investors Look Next? 

The million-dollar question: if you were to invest in ONE place right now, where would it be? 

Melbourne appears to be undervalued (but always do your research). 

• Its median house price shouldn’t be lower than Brisbane’s—but it is. 
• Over time, Melbourne’s market will correct, offering strong long-term value. 
• Infrastructure investment will play a key role in boosting property values. 

Meanwhile, Perth has been the darling of the property world in recent years, but its rapid price growth might start to cool slightly. 

If you’re looking for undervalued opportunities, Melbourne may be put on your radar. If you want strong current rental yields, Perth still holds appeal—but maybe not for much longer. 

Final Thoughts: The Property Market is in a Holding Pattern—For Now 

• Interest rates are looking to drop in the short-medium term. 
• Investor activity is on a slight pause but will pick up as borrowing capacity increases. 
• Housing shortages will keep pressure on prices and rents for some years to come. 
• Melbourne might just be the next hidden gem for investors. 

If you have clients that are on the fence about property, now might be the time to start helping them prepare—because once the market moves, it moves fast. 

Want to stay ahead of the curve and be proactive with your investor-clients? Keep an eye on interest rate movements, government policies, and infrastructure developments. And, as always, encourage your clients to invest wisely. As part of our MFAA-Endorsed Mentor Program, we give you the tools, knowledge and know-how to be able to do this successfully, and support your investor-clients better. Contact us today.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute professional advice. Readers should conduct their own research and consult with qualified financial, legal, or real estate professionals before making any investment or financial decisions. The opinions expressed herein are based on available data and expert insights at the time of publication and may be subject to change.