Agents to adapt as investors turn more cautious, selective, and strategic

Momentum Wealth managing director Damian Collins said that while 2025 had been strong for investors, 2026 will see rising values squeeze affordability, with more turning to interstate markets to diversify their portfolios and tap into better opportunities.

“At the same time, many home owners and investors are sitting on significant equity, which can be leveraged with professional advice to build further wealth.”

“With interest rates shifting into a tightening phase, investors are being encouraged to review borrowing structures, refinancing options, and broader strategies to stay ahead.”

Compiled from more than 670 investors, of which 57 per cent own investment property and 32 per cent own only their home, while the rest were renters or rentvestors.

Most investors, of working-age, mid-to-higher income households, held a single property at 69 per cent, while 31 per cent owned multiple, averaging 3.9 properties.

The survey found that 50 per cent of respondents prioritise building long-term passive income for retirement, up from 23.5 per cent in 2025, while 35 per cent said they were focused on saving to purchase additional investment properties.

In total, 35 per cent of respondents said they were planning to buy an investment property in the next 12 months, including 47 per cent of aspiring investors and 29 per cent of current investors.

As key barriers, respondents cited macroeconomic conditions and personal circumstances, with 23 per cent concerned about interest rates, 22 per cent lacking deposit or equity, and 21 per cent focused on reducing debt.

Meanwhile, 15 per cent said nothing was stopping them from buying and were ready to purchase now.

Interstate investments boom

According to the report, three capitals, Brisbane, Perth, and Melbourne, have emerged as the nation’s most favoured investment locations.

Perth, Brisbane and Melbourne have closely ranked as Australia’s top property investment cities, with Brisbane at 23 per cent, Perth at 22 per cent and Melbourne at 21 per cent overall.

According to the data, Brisbane appeals broadly across all investor age groups, with the surveyed citing capital and strong population growth, interstate migration and the 17.3 per cent annual median dwelling price growth ahead of the 2032 Olympics.

On the other side of the country, Perth has been strongly favoured by over-55s, with 50 per cent naming it the top investment city, driven by strong capital growth of 22 per cent and total returns of 27.1 per cent.

Similarly, Melbourne sentiment has more than doubled to 21 per cent in 2026 compared to 10.3 per cent in 2024, driven by improved affordability and a median home value of $826,132, with the city particularly favoured by 36–45s.

The survey found interstate investing has reached a new peak, with 73 per cent of respondents open to buying outside their home state, up from 67.1 per cent in 2025, which Collins said highlighted a growing shift towards diversification.

While the interstate buying trend has been widespread across most states, WA residents showed slightly lower interest at 65 per cent.

Collins said the key advantage of investing interstate has been portfolio diversification, noting that investors who stuck to nearby suburbs they know were concentrating rather than spreading risk.

“Property markets around Australia don’t all move in sync. Returns are shaped by a range of factors, many of which can be locally driven, such as population growth or issues such as land rezoning,” he said.

“So, along with diversification, investing interstate offers opportunities to tap into market conditions that may be unique to a particular state or city.”

“By holding assets across different states, investors can capture growth as it emerges in each market, while reducing exposure to downturns in any single location.”

In addition, Collins said investing interstate can help investors access affordability gaps, stronger growth, varied rental demand, and potentially lower state-based taxes such as stamp duty and land tax.

Preferred asset and commercial appeal

While the appeal of commercial real estate has been growing, the survey found that established houses remained investors’ favourite asset class at 62 per cent.

Data showed that this year, interest in house-and-land projects has grown to 42 per cent, likely driven by stronger depreciation benefits from new builds and the added land component not typically found in townhouses or apartments.

Collins said investor preference for established houses has been driven by land appreciating while buildings depreciate, and by their location in tightly held suburbs where scarce vacant land supports long-term value growth.

“By contrast, house-and-land packages are typically found in outer suburban estates, and the steady stream of new homes coming onto the market can stifle capital growth, especially over the short term.”

For other property types, investors preferred townhouses and villas at 38 per cent, followed by apartments and units at 20 per cent.

Collins said the outlook for townhouses and villas was less clear-cut, as they were often found on infill sites in established suburbs where high land values make it viable to build multiple, low-maintenance dwellings.

While residential property was the clear favourite among investors, 30 per cent of respondents held commercial property, and only just over 10 per cent owned more than one commercial asset.

Despite lower current commercial ownership, 65 per cent of investors said they were open to commercial property, with aspiring investors (70 per cent) more likely to consider it than current investors (60 per cent).

According to Collins, a lack of knowledge has been the main barrier to investing in commercial property, with almost half of those who aren’t considering it saying they didn’t know enough about the market to invest.

He added that interest also declined with age, with half of investors aged 56 and over open to commercial property compared to 65 per cent across all age groups.

“It is worth noting, though, that commercial property can be very appealing to older investors seeking a reliable income stream. This reflects the tendency of commercial property to deliver higher yields than residential property,” he said.

Selling intentions

In addition to buying intention, the survey found that only 15 per cent of investors planned to sell a property in the next 12 months, down from 16 per cent in 2025 and 20 per cent in 2024.

In comparison, Collins said that 70 per cent of the surveyed intended to hold, reflecting strong long-term confidence in property as a growth asset following national gains of 9.9 per cent over the past year and 43.6 per cent over five years

The research also found that nearly one in two investors preferred a mix of growth and income portfolio.

While two-thirds of investors reported having a property investment plan, only 56 per cent reviewed their portfolio annually, with 73 per cent doing so within the past two years.

“In a rapidly changing market, this suggests the need for more regular, expert-backed reviews of property holdings,” Collins concluded.