January 2026 looks a lot like last year: buyers steady, decisions made over the summer break, and more stock about to hit the market. Expect the next quarter to bring increased supply, which will create opportunities for investors—but also a few headaches driven by policy, bureaucracy and broader economic forces.
Short-term outlook: demand steady, supply rising
People tend to make property decisions over the summer. That means January usually just confirms plans made in December. Demand remains broadly the same, but the big change this year will be an uptick in supply. More properties coming to market is good news for buyers and investors looking for choice and potential bargains.
Supply arriving faster will ease some pressure on prices, but only if councils and consent processes stop slowing everything down. The main bottleneck isn't developers—it is the pace of approvals, inspections and the costs tied to bureaucracy.
Election impact: when the market will react With the election set for 7 November, expect the market to feel the political chill in the months beforehand. In practical terms, look for a slowdown around July to September as buyers and sellers hesitate. That quiet patch is usually short lived—once the result is known, people get back to business.
How to position yourself Be ready for a short pause in activity mid-year. That can be a buying opportunity if you have your financing lined up. Pay attention to policy announcements—especially anything on property tax or investor rules. Even proposals can change sentiment. Three things every investor should watch in 2026
good for buyers. But it only helps if houses actually get built and consented in a timely manner. The faster consents and inspections happen, the quicker the market balances.
Capital gains tax and other housing policies create uncertainty. Policy changes can affect who sells, who buys and how quickly transactions happen. Expect headline-driven sentiment swings around election season.
Interest rates remain one of the most powerful levers. Lower rates stimulate activity, higher rates cool it. The Reserve Bank often acts with a lag; that timing mismatch can amplify cycles. Right now, rates are likely to stay where they are given the current market strength.
Townhouses were designed to add supply and ease the housing shortage. Developers are not villains—they respond to demand and take financial risk. The real problem is the slow system around them: consents, inspections and council fees that add time and cost.
Fixing the system would help far more than berating builders. Faster consent processing, more inspectors and lower bureaucracy would get homes built quicker, increase supply and make housing more affordable in the long run.
From the perspective that values keeping money in people's hands, a broad, low tax is preferable to targeted capital gains levies that often hurt those who need protection the most. Whichever side you sit on, policy changes of this kind will affect market behaviour—especially near elections.
Monetary policy works in theory: lower rates boost demand, higher rates reduce it. In practice, timing matters. Rate cuts or hikes can be too late by several months. When rates fall, activity usually picks up; when they rise, the market cools. Expect central bank moves to remain a key driver of property cycles.
Longer-term risk: jobs, AI and automation There are structural risks beyond property policy. Automation and AI are reshaping the labour market. If white-collar job numbers fall significantly over the next decade, this will affect rental demand, households' ability to service debt and the types of properties that remain in demand.
Investors should consider how technological change might alter local economies, job security and long-term rental needs. Diversify where possible and focus on fundamentals: location, rental demand and property quality.
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