The Australian Property Report July - December 2025 21 Affordability pressures are now starting to influence vacancy rates. After reaching lows of 0.8%, vacancies have begun to rise modestly to levels between 1.2% and 1.9% in markets like Sydney. Nationally, the average sits around 2.29%, reflecting a broader normalisation of market conditions. This trend is expected to continue as broader economic factors, particularly interest rates and consumer confidence, exert their influence. Despite the challenges, opportunities remain for investors, particularly those with a medium to long-term outlook. As interest rates are expected to ease, we may see a cautious return of investors to the market, although this is likely to be focused on the more affordable unit segment rather than detached housing. Cities like Adelaide, Perth and Melbourne are beginning to attract attention, albeit not yet at a level sufficient to resolve the underlying supply issues. In short, while the market is showing signs of stabilisation, it remains in transition. Investors who navigate the evolving regulatory and economic landscape strategically can still find significant opportunities to optimise yields and grow the value of their assets. The current environment rewards patience, adaptability and a forward-looking approach to residential investment. Source: CoreLogic. 80 Louisa Road, Birchgrove, NSW
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