The latest Property Investment Professionals of Australia (PIPA) National Market Update has recognised the conditions being experienced in each state are diverging significantly as the real estate sector recalibrates.
The industry body indicated the shift has come in response to the 2026 federal budget, which has resulted in a loss of buyer confidence.
PIPA chair Cate Bakos noted the New South Wales market is witnessing an irrefutable downturn, evidenced by Sydney auction clearance rates dipping below 50 per cent and premium suburbs discounting up to 10 per cent.
Bakos also acknowledged Victorian investors are realigning their focus to different sectors.
“Victoria is seeing investors pivot from established Melbourne houses toward regional centres like Bendigo and Ballarat, where yields are stronger,” she said.
“Boutique apartments are also regaining favour, offering rental returns above 5 per cent as borrowing capacity contracts.”
In the north of the country, the Queensland market is active but segmented, the analysis stated.
“Greater Brisbane’s affordability constraints are pushing demand into units, while regional hubs such as Rockhampton and Toowoomba stand out with yields above 5 per cent, as well as major infrastructure drivers,” Bakos explained.
She indicated the sector in Western Australia is slowing, even though it is outperforming its peers, with values having increased annually, but with listings doubling the time they have spent on the market.
Further, she pointed out the long boom in South Australia has softened since the budget was handed down, with auction clearance rates falling and inexperienced developers exposed.
“Still, low unemployment and strong fundamentals suggest a cyclical slowdown rather than a crash,” she said.
Finally, she confirmed Tasmania has enjoyed steady growth, especially in Launceston and the north-west, where investors are focused on affordability and yields.
“Overall the national market is cooling, but fundamentals such as infrastructure, affordability and rental demand continue to underpin long-term resilience,” she observed.
“The cycle is shifting from momentum-driven growth to selective and strategy-led opportunities.”