Australia’s inflation rate ticked up in August to 3.0% year-on-year, driven largely by housing costs. In fact, housing prices rose about 4.5% in the year to August, while rents have eased to roughly 3.7%. Despite the uptick, underlying inflation (the “trimmed mean” at 2.6%) hasn’t run away. Market analysts note these monthly CPI figures can be volatile, and the Reserve Bank is more focused on long-term trends. With benchmark rates likely held around 3.6% for now, borrowing power for buyers should stay broadly steady in the near term.

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At the same time, something interesting is happening in housing: many existing investors are choosing to sell up. PIPA’s latest survey shows a record share of investors offloading properties – 16.7% in 2025, up from 14.1% in 2024 and 12.1% in 2023.

Why are more investors selling and who’s buying instead

PIPA (the Property Investment Professionals of Australia) reports that thousands of investors have been “forced out by rising costs and policy uncertainty”. For example, 14.1% of investors sold a property last year (up from 12.1% the year before). Many sellers had owned their properties for 3–10 years, though the largest single group had held homes for 10–20 years. Many blamed surging holding costs (land tax, levies and compliance) and fears of future tax changes. As PIPA Chairman Lachlan Vidler observes, “investors are selling up, and the homes they leave behind are often snapped up by owner-occupiers”.

Key considerations for buyers

• Timing: There’s no need to wait. Rate cuts have been pushed out (some forecasts now see rates on hold into mid-2026), which means your loan borrowing power is about the same now as it will be later. Use this time to get pre-approved and shortlist properties. Acting early lets you beat competitors who may only enter when rates eventually fall.
  
  

• Strategy: Combine good yields with motivated sellers. Look in suburbs where rent returns are strong and vacancies are tight. In these areas, rental income remains solid, but sellers who bought at the market peak may be more willing to negotiate. This lets you capture both reliable rent and a better purchase price.
  
  

• Product fit: Think about your mortgage structure and budget for bills. Fixed-rate loans can lock in today’s interest costs, but make sure you have buffers for living expenses. Notably, last year’s government electricity bill rebates have now ended, meaning household power bills are set to rise again. Insurance, utilities and other costs keep increasing with inflation. We recommend building a financial cushion (or using offset accounts) to handle these shocks.
  
  

• Risk checks: Always run the numbers conservatively. Can the rent cover your repayments if interest or living costs rise? Work through scenarios – for example, account for the loss of those electricity rebates or any tax changes down the track. Ensure you’d still be cash-flow-positive if bills and insurance went up. A well-structured budget and loan (with room to maneuver) will keep you secure if inflation or costs surprise.
  
  

Ready to make your move? This shifting market puts buyers in the driver’s seat, but only if you’re prepared. As Prowealth Properties’ buyer’s agents, we can help you navigate these conditions.

Give us a call on 0433 853 248 or reach out for a free consultation. Our team at Prowealth Properties can help you understand your borrowing power and narrow down the best options. We’ll be with you every step of the way to make sure your next move is a smart one.