By Rich Harvey, CEO & Founder, propertybuyer.com.au
January has a unique energy.
New diaries. New intentions. And for many Australians, a quiet but persistent thought that keeps resurfacing while the coffee is brewing or the kids are still asleep:
“We should really get our property plans sorted this year.”
If that sounds familiar, you’re not alone.
What makes this January different is that the next five years in property will not look like the last five. In fact, the forces shaping the market from 2026 to 2031 are already locked in, and one word sits at the centre of it all.
Scarcity!
Not hype. Not speculation. Not wishful thinking. Structural scarcity.
And it will quietly but powerfully influence prices, rents, and opportunity across Australia.
The Supply Problem Nobody Has Fixed
Australia has been talking about a housing shortage for years. The difference now is that the gap is widening faster than our ability to close it.
Population growth has rebounded strongly, driven by overseas migration, returning students, and natural population growth. At the same time, housing construction has stalled.
Why?
- Construction costs remain elevated
- Builder insolvencies have thinned the industry
- Planning delays continue to frustrate supply
- Skilled labour shortages are real and persistent
- Developers struggle to make projects stack up financially.
Even with government targets and announcements, the delivery simply is not happening at the scale required.
Housing approvals today are still well below what is needed just to keep up, let alone catch up.
This is not a short-term imbalance. It is a multi-year structural issue.
Scarcity Changes Behaviour
When supply falls behind demand, markets behave differently.
Buyers become more competitive. Renters stay longer. Vacancy rates tighten. Rents rise first, then prices follow.
We are already seeing this play out.
Across many capital cities and key regional centres, rental vacancy rates are hovering around historic lows. In some suburbs, they are below 1 percent.
That is not a healthy equilibrium. It is a pressure cooker.
And when pressure builds, something eventually moves.
What the Next Five Years Are Likely to Look Like
Looking ahead to 2026–2031, several themes stand out. Together, they explain why the next phase of the property market will be defined less by speculation, and more by fundamentals.
1. Supply shortfalls will underpin prices
Australia is entering a pivotal five years for housing.
Current projections suggest the national target for new home construction could fall short by 300,000 to 400,000 dwellings by the end of the decade. New South Wales alone accounts for nearly half of that gap, with Queensland and Victoria also facing meaningful shortfalls.
This matters because persistent undersupply places a firm floor under prices in well-located markets. When fewer homes are available, prices do not need exuberance to grow. They simply need ongoing demand.
This is not about runaway booms everywhere. It is about resilience.
2. Capital cities will move unevenly
The next five years will not deliver uniform outcomes.
Sydney remains constrained by land scarcity and planning limits, which continues to concentrate demand in established areas. Melbourne’s affordability challenge is pushing many buyers toward outer suburbs or nearby regional centres where budgets stretch further. Brisbane stands out for its combination of population growth, lifestyle appeal, and relative affordability, which continues to support demand for both houses and well-located units.
Understanding these differences is critical. National averages hide local realities, and opportunity is increasingly market-specific.
3. Rents will stay under pressure
Rental markets respond faster than sales markets, and scarcity shows up here first.
With limited new stock coming online, tenants compete for what already exists. Vacancy rates remain tight, and rental growth continues to outpace wage growth in many areas.
For investors, this marks a return to fundamentals. Income matters again. Yield, cash flow, and rental durability are back at the centre of sensible portfolio building.
4. Household needs are changing
Scarcity does not lift all boats equally. Quality and location will matter more than ever.
Homes close to employment, transport, schools, lifestyle infrastructure, and amenities will outperform generic stock in fringe or oversupplied locations.
Being selective is not optional. It is essential.
Demand is not just growing. It is shifting.
More Australians now live alone. Multi-generational households are becoming more common. Retirees increasingly favour low-maintenance homes, while younger buyers adapt by turning to apartments, townhouses, and medium-density housing where detached homes are no longer accessible.
Detached houses continue to show strong long-term resilience, particularly in land-constrained areas. Medium-density homes, however, are playing a larger role as practical entry points in high-demand markets.
The mix matters. So does understanding who your future buyer or tenant will be.
5. Timing matters less than positioning
Many buyers remain focused on trying to pick the perfect moment.
In a supply-constrained environment, that mindset can be costly.
Being well positioned in the right asset, in the right location, with the right fundamentals, tends to matter far more than waiting for ideal conditions that rarely arrive.
Scarcity rewards preparation, not perfection.
Opportunity Still Exists, But It Is Narrower
One of the biggest mistakes buyers make is assuming that if prices rise, opportunity disappears.
In reality, opportunity changes shape.
It moves into overlooked suburbs. It rewards buyers who do deeper research. It favours those who act early, not emotionally.
Scarcity does not eliminate opportunity. It raises the bar for decision-making.
This is where independent advice matters most.
When supply is tight and competition is high, mistakes become more expensive. Overpaying, compromising on fundamentals, or buying the wrong asset can set plans back by years.
Why We Prepared a 5-Year Outlook
Over the past year, my team and I have been working on a comprehensive new report:
Australian Property Market Outlook 2026–2031: The Great Supply Crunch Coming. You can download your copy of this report by clicking here.
The purpose of this report is not to predict headlines. It is to provide clarity.
It draws on insights from more than 20 leading housing analysts and data from REA, Domain, Cotality, SQM Research, Ray White, the ABS, the RBA, and the Housing Industry Association.
We have combined expert commentary with real data to answer the questions that matter most.
- How many homes are likely to be built.
- Where demand will be strongest.
- Which property types will matter most.
- And who will feel the pressure first.
These are forecasts, not promises. Markets can and do change. But preparation beats prediction every time.
A Final Thought as the Year Begins
Property decisions shape decades, not months.
The coming five years will reward calm, informed, and strategic buyers. They will be less forgiving to those who rely on hope, headlines, or outdated assumptions.
If one theme defines the next phase of the market, it is this:
Scarcity favours preparation.
If 2026 is the year you want to move from thinking to acting, start by understanding the terrain ahead.
Clarity always comes before confidence.
Wishing you a focused, prosperous, and well-planned year ahead.
Warm regards,
Rich Harvey
CEO & Founder
Propertybuyer
Give us a call on 1300 655 615 to start a conversation about your next property purchase, or click here to send us your enquiry today.
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