Welcome to Property Edge – our weekly newsletter to give you the drop on the competition – global and local shifts may give you a leg up in coming months …

How Global Economic Shifts Could Reshape Australia’s Property Market

3 Economic Moves From US and China – What They Mean for Your Property Strategy

The global economy is shifting, and Australia’s property market won’t be immune. Two major forces are at play:

Scenario 1: Interest Rate Cuts Drive Prices Higher

If the US enters a recession, the Reserve Bank of Australia (RBA) could slash interest rates to support the economy.

• Lower interest rates would boost borrowing power, allowing buyers to take on larger loans.
• Increased demand could push house prices higher, as more buyers compete for limited stock.
• First-home buyers would benefit from lower repayments, but rising property values could outpace wage growth, making it harder to save a deposit.

This scenario would fuel market activity, but affordability would become a growing concern.

Scenario 2: Trade Wars Push Interest Rates Higher

US President Donald Trump’s proposed 25% tariffs on steel and aluminium imports—including from Australia—could trigger a global trade war.

• If inflation rises, central banks may raise interest rates instead of cutting them.
• Borrowing capacity would shrink, leading to weaker house price growth.
• Buyers would be more cautious, and properties would take longer to sell.

This could shift the market in favour of buyers, creating opportunities for those with cash or strong financing.

Scenario 3: Stagflation Hits the Market

The worst-case scenario? Stagflation—a mix of high inflation and slow economic growth.

• A Chinese economic slowdown could reduce demand for Australian resources, impacting Queensland and WA the hardest.
• With job losses in these regions, we could see population outflows and weaker housing demand.
• Households facing higher living costs and stagnant wages would struggle to save deposits or qualify for home loans.
• Outer suburbs and resource-dependent regions would see price declines, while premium city locations would hold value.

Investors would also feel the squeeze as rising costs impact rental returns.

What Should Buyers and Investors Do?

While global uncertainty is a factor, Australia’s property market has proven resilient over time. Smart investors and buyers should:

• Plan for different outcomes—whether rates rise or fall, ensure you can manage repayments.
• Look at long-term fundamentals—location, supply-demand trends, and employment drivers still matter.
• Stay flexible—opportunities may emerge in different market segments depending on how global events unfold.

The next 12 months could reshape the property landscape. Staying informed and adaptable will be key to making the right moves.

Half a Million Homes Short – What It Means for Flippers & Small Developers

Australia’s housing crisis isn’t just a challenge for renters and buyers—it’s an opportunity (and a risk) for small developers and property flippers. With a projected shortfall of 462,000 homes by 2029, the demand for new housing is outpacing supply, creating potential profit margins for those who can move quickly. But government roadblocks and rising costs are still hurdles that need navigating.

What the Supply Crisis Means for Small Developers & Flippers

The lack of housing supply could work in your favour—but only if you understand the dynamics at play:

• Tight supply = strong demand – Well-located, newly built or renovated homes will continue to command premium prices.
• Longer approval times – Local councils and planning departments are dragging their feet, making fast turnarounds difficult for small developers.
• Construction costs are rising – The average cost to build a home has now surpassed 500,000, squeezing profit margins on new builds.
• Renters & buyers have fewer choices – If the supply crisis persists, flipping well-renovated properties could yield strong profits as buyers compete for limited stock.

Opportunities for Flippers & Developers

Despite the bottlenecks, there are opportunities for those who can act strategically:

1. Focus on High-Demand, Low-Supply Areas

• NSW is short 185,000 homes, making Sydney and regional growth areas prime targets for small-scale projects.
• Queensland (96,000 shortfall) and Victoria (71,000 shortfall) are also feeling the squeeze—meaning renovated properties in undersupplied markets will sell fast.

2. Look for Underdeveloped Land or Knockdown Deals

• With land releases lagging, land banking in key growth corridors could provide solid future appreciation.
• Subdivision potential & duplex builds could become more valuable as density increases.

3. Fast-Track Approvals Where Possible

• While local councils are slow, the federal government’s New Homes Bonus (3 bil program to incentivize more building) could push some councils to speed up approvals.
• Developers with strong planning consultants or pre-approved sites will have an edge over those stuck in the system.

4. Leverage the Rental Crisis for Higher Returns

• If it’s getting harder to build, existing homes will become more valuable, making cosmetic flips or minor renovations highly profitable.
• Holding properties for rental income instead of selling immediately could yield strong returns while waiting for further market shifts.

Key Risks to Watch

• Government Intervention – If new incentives or fast-tracking measures kick in, there could be a surge of supply later, potentially capping price growth.
• Construction Costs & Delays – Builders are struggling with supply chain issues and material shortages, so budget accordingly.
• Rising Interest Rates (or Not) – If rate cuts come, buying power will surge, helping sales—but if inflation worsens, borrowing could tighten even further.

Final Takeaway

The housing crisis creates an opening for smart, well-positioned developers and flippers. The key is targeting undersupplied areas, leveraging government policy shifts, and staying ahead of market trends.

With the right strategy, small developers and investors can turn this housing shortfall into a long-term advantage.

Federal Election 2025: What It Means for You – Uncertainty or Opportunity?

With the 2025 Federal Election looming, uncertainty is creeping into the property market. But for flippers, small developers, and investors, this isn’t necessarily bad news. Historically, elections create short-term hesitation, but smart operators know that uncertainty often equals opportunity.

How Elections Impact the Property Market

Elections don’t crash the market, but they do slow things down temporarily:

• Buyers and sellers delay decisions – Transactions typically dip in the months leading up to an election as people adopt a “wait and see” approach.
• Auction clearance rates decline – Buyers become more cautious, leading to fewer sales.
• Listings drop – Many sellers hold off until the uncertainty clears.

But once the election is over, the market stabilises quickly. Within 3-6 months, activity resumes as confidence returns.

For developers and flippers, this period of hesitation can be a golden window to buy with less competition.

Key Policies That Could Impact Flippers & Developers

1. Negative Gearing & Capital Gains Tax (CGT)

• No major changes expected – In 2019, Labor proposed winding back negative gearing, causing investor panic. When they lost, confidence rebounded, and prices surged.
• Both major parties have avoided these policies in recent elections—they know property owners vote.
• If either party hints at tax changes, expect temporary market jitters that could create buying opportunities before prices correct.

2. Housing Supply & Development Incentives

• Labor is targeting 1.2 million new homes in 5 years, but the industry knows this won’t happen.
• The Coalition is proposing a 5 bil infrastructure boost and reducing migration by 25%, which could ease demand pressures but won’t solve the supply crisis.
• If developers receive fast-tracked approvals or tax breaks, there could be new opportunities to capitalize on development incentives.

3. First-Home Buyer Schemes & Affordability Measures

• Governments love first-home buyer schemes because they’re politically popular.
• Labor’s Help to Buy Scheme and the Coalition’s Super for Housing policy both boost demand but don’t fix supply issues.
• If more buyers enter the market with government-backed schemes, entry-level properties and well-renovated stock will be in high demand.

What Should Flippers & Small Developers Do?

• Look for Pre-Election Deals – Market hesitation often means less buyer competition and motivated sellers.
• Watch for Policy Shifts – If new development incentives emerge, small-scale projects could become more profitable.
• Don’t Overreact – Interest rates and supply-demand factors matter more than who wins the election.
• Focus on Undersupplied Markets – Housing shortages mean flips and new builds will remain in demand, especially if supply stays constrained.

Bottom Line: Elections Create Short-Term Uncertainty, But the Market Moves On

While headlines may fuel election anxiety, experienced players know the real drivers of price growth are interest rates, supply constraints, and population trends.

The best opportunities often arise when others hesitate—so if election jitters slow the market, smart flippers and developers will be ready to act.

That’s it for this week. Local and global forces are going to force change in the short term which in turn brings opportunity to those waiting and watching for the wave and ready to paddle like crazy to ride it to the shore!

Warm Regards,

Property Lovers

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