“The pool of rental properties is likely to shrink… and you’re likely to see the vacancy rates in residential stay quite low and the upward pressure on rents continue for the foreseeable future,” he said.
Longer development timeframes may also deter investors from new-build housing. “New buildings could take a couple of years,” he said, adding that many investors “don’t want to wait” and prefer to “get their properties on the market virtually straight away.”
Stanley noted that build-to-rent was an expanding segment, with “around 15,000 Build-to-Rent apartments already developed in Australia and it’s growing very quickly.” However, he acknowledged these developments “do take a long time to build,” pointing to a likely near-term supply gap.
Commercial sector draws interest
Stanley said commercial property offered investors a different set of characteristics as conditions shifted. “Commercial property… has a higher return and has more stable returns, longer-term leases. You’re locked in,” he said, adding that negative gearing “still applies” to the sector.
Private investors remain the bedrock of commercial property activity. “It tends to really be the foundation of commercial property investing year in and year out,” Stanley said. Private buyers accounted for approximately 33% of market activity so far in 2026, he said. These investors typically focus on smaller assets — including smaller warehouses, shops and childcare centres — with average sale prices below $5 million.
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