10 property forecasts for the next decade and 10 things that will stay the same

We're already into 2026, and the last few months have been a time when little creatures come out of hibernation – they’re called forecasters, and their predictions of what lies ahead of us abound.

These relate to all areas, particularly property, because almost anyone who owns real estate would give their second garage to know what will happen to prices in the future.

But first, it’s important to understand…

The difference between Forecasts and Expectations

I expect there to be a recession in the next decade. But I don’t know when it will come.

I expect that some investments I make won’t do as well as I would like them to. But I don’t know which ones they will be.

I expect the property market to boom for a few more years and then prices will drop again. But I don’t know when the current upturn phase of the cycle will end.

I expect interest rates will remain high for a while longer than we would like and then may drop a little. Probably not till the last quarter of the year. In fact, I don’t know when.

And I expect another world financial crisis.

But I have no idea when it will come.

Now these are not contradictions or a form of cop out.

You see… there’s a big difference between an expectation and a forecast.

An expectation is an acknowledgement of how things worked in the past and will likely work in the future.

A forecast is putting a time frame to that expectation.

Of course, in an ideal world, we would be able to forecast what’s ahead for our property markets with a level of accuracy.

But we can’t because there are just too many moving parts.

Sure, there are all those statistics that are easy to quantify, but what is hard to identify is exactly when and how millions of strangers will act in response to the prevailing economic and political environment.

Then there will be those X factors that crop up each year- those unforeseen events that come out of the blue, which could be local or overseas that undo all the forecasts we made.

So what should you do about this?

I’ve found the most practical approach is to have expectations of what could happen without specific forecasts.

That’s because when you expect something to happen at some stage in the future, you’re not surprised when it happens.

Expecting the worst while preparing for the best forces you to invest with room for error, and psychologically prepares you for the inevitable disappointments.

This is exactly how I took advantage of the property boom of 2020-21 and how I planned for the property downturn that followed it.

I didn’t know when it would come, how long it would last or how it would affect the value of my property portfolio or the cash flow of my business.

But I just knew a downturn would come once again, and I was prepared for it with cash flow buffers to see me through the difficult times.

What I’m trying to explain is that there’s a huge difference between, “I expect another next property downturn sometime in the next decade” and “I expect the next property downturn in the second half of 2028.”

One of the big differences is how I invest.

If I expect this current property upturn we’re experiencing will be followed by another property downturn, then I won’t be surprised when it comes.

But since I don’t know when this will happen, I won’t make the focus of my property investing trying to time the property cycle.

Because trying to time the property cycle is one of the reasons many property investors fail.

On the other hand, strategic investors maximise their profits during booms and minimise their downside during busts by investing in assets that have always outperformed, rather than looking for the next hot spot or for the type of property strategy that works “now” rather than one that has worked in the long term.

They own investment-grade assets in investment-grade inner and middle ring suburbs of Australia’s three big capital cities.

The type of property that keeps growing in value over time without fluctuating wildly in price when the property cycle slows down.

So what’s ahead for property?

Having said that, I’d bet that you’d still like to know what’s ahead for our property markets.

I know some people suggest that if you want to know what lies ahead, start by looking at the clues behind you, but in my mind, the next decade will be different to the last decade.

Let’s start with…

10 things that will stay the same

1. Australia’s population will keep growing strongly

If you think the last few years of property shifts were significant, you haven't seen anything yet.

While the breathless headlines about "record-breaking" post-COVID migration are starting to fade, the underlying trend is undeniable: Australia is getting bigger, older, and more concentrated than ever before.

Revised government forecasts confirm we are on track for a population of nearly 31.5 million by 2036.

That’s roughly 4 million more people calling Australia home in just over a decade—effectively adding a city the size of Brisbane to our population map.

But the "where" matters more than the "how many."

We are witnessing the emergence of a two-speed nation.

Our capital cities are projected to grow at double the pace of regional areas, intensifying the competition for well-located inner-ring properties.

In a historic shift, Melbourne is on track to overtake Sydney as the nation's largest city by the early 2030s, driven by its ability to absorb a larger share of overseas migrants.

Meanwhile, a "Silver Tsunami" is approaching. The fastest-growing demographic isn't young families, but the 75+ age bracket, which will swell by nearly 1 million people.

This structural shift will quietly rewrite the rules of housing demand, putting a premium on low-maintenance, accessible dwellings and keeping household sizes shrinking, meaning we will need more homes just to house the same number of people.

For the strategic investor, the next decade isn't just about rising tides lifting all boats; it's about identifying the specific markets where chronic undersupply meets relentless demographic pressure.

2. More congestion on our roads

While it has been shown overseas that cities can be liveable despite having very large populations of many millions, the infrastructure, and in particular public transport, needs to accommodate the population.

Unfortunately, Australia's infrastructure growth has not kept pace with our rising population, meaning roads will become more clogged, and it's unlikely our governments will find the money necessary to upgrade our infrastructure.

This means accommodation in proximity to public transport will become more sought after and relatively more valuable.

3. Property prices will continue to increase

That's what's been happening since Federation, but some areas will appreciate more than others.

And the age-old adage of 'location, location, location' will continue to hold true, with property values heavily influenced by location.

Property values in the inner and middle ring suburbs of our large capital cities, where locals are relatively wealthy and have more disposable income, will increase proportionally more than in the outer suburbs.

Over the coming decade, the poor will live further out than ever because the rich do not like commuting and will continue to live in our leafy, more established suburbs close to amenities and public transport.

4. We’ll have the requirement to build around 240,000 new dwellings each year

But we're currently falling short of this target.

5. The property cycle will continue

It will continue with periods of growth, stabilisation, and correction, but the long-term trend will be upward, driven by owner occupiers, while the cyclical ups and downs will be more driven by investors falling prey to fear and greed.

6. Australians will continue to aspire to home ownership

This will continue to underpin our property markets.

A large percentage of the hundreds of thousands of migrants coming to Australia will also aspire to home ownership, in fact, that’s one of the many reasons they have come to Australia.

However, over the coming decade, more of us will move to medium and high-density living – apartments and townhouses.

7. Ordinary Australians will continue to invest in property

Ordinary Australians will continue to seek to secure their financial future through property investment, given its potential for capital growth and rental income.

8. Property pessimists will still exist

The property pessimists will still be out there telling us not to invest, and that our property markets are going to crash.

9. Property spruikers and get rich quick artists

Property spruikers and get rich quick artists will still be there taking money from naïve property investors looking for a shortcut to get rich quick in real estate.

• Also read:Melbourne property market forecast for 2026 | Is it a good time to invest in Melbourne?
• Also read:Latest Property Price Forecasts Revealed. Australian Property Market Outlook 2026: Where To For Prices With Further Rate Cuts Unlikely.
• Also read:Sydney property market forecast for 2026. Is it a good time to invest in Sydney?
• Also read:Brisbane Property Market Forecast [2026] – What’s Ahead & Where to Invest
• Also read:The Inheritance Tsunami: What the Baby Boomer Home Legacy Means for Future Generations

10. Australia will remain the best country in the world

Now let’s look at…

10 things that will be different over the next decade

1. We will have a period of higher interest rates.

The likelihood of significantly higher interest rates over the entire next decade is relatively low, but they are expected to be higher than the pre-pandemic lows seen in the 2010s.

The long-term trajectory for the Reserve Bank of Australia (RBA) cash rate is to stabilise around a new, higher 'neutral' rate.

This neutral rate is the level that neither stimulates nor restricts the economy over the long run, and current RBA thinking places this nominal rate somewhere between 3.0% and 3.6%.

This is higher than the sub-3% rates of the 2015-2020 period due to structural shifts like increased global government debt, the costs associated with the green energy transition, and an assumed increase in the natural rate of inflation.

For the near term (2026-2027), the RBA's path is highly uncertain and entirely dependent on bringing inflation sustainably back into the 2–3% target band.

While current forecasts  suggest the RBA has finished its recent cutting cycle and is currently holding steady at around 3.60%, any renewed strength in services inflation or a tightening of the labour market could force the RBA to resume hiking rates.

However, once inflation is credibly defeated, market expectations are for the cash rate to settle into the estimated 3.0%–3.6% long-term neutral range.

The key risk over the next decade is not that rates hit 7% again, but that sticky inflation, driven by housing costs, wage growth, and poor productivity, prevents the RBA from cutting rates to the lower end of that neutral range, keeping borrowing costs perpetually higher for property owners.

2. Rents will grow strongly

The strong likelihood is that rental growth will continue to significantly outpace inflation and wage growth over the next few years, maintaining intense pressure on tenants.

My projection is based on a chronic structural imbalance driven by the two key factors:

1.  Demand remains unrelenting due to high Net Overseas Migration and a simultaneous reduction in average household size (meaning more dwellings are needed per person).
2. New supply is minimal and structurally constrained. Despite government targets to build 1.2 million new homes by 2029, the housing shortfall is projected to reach nearly 80,000 dwellings by that time, as high construction costs, labour shortages, and complex planning delays restrict the completion pipeline.
   Forecasters suggest apartment supply, a key component of rental stock, is running 20–40% below what is needed to simply hold vacancy rates steady.

Consequently, vacancy rates are not expected to recover to the healthy 2.5% long-term average anytime soon.

National vacancy rates are sitting around 1.4% and as long as the vacancy rate remains below 2.0%, the market overwhelmingly favours landlords, leading to sustained rental growth.

For property investors, this tight environment translates to strong rental yields and a high degree of confidence in rental income stability.

SQM Research anticipates median rents across capital cities to grow by 24% between 2025 and 2030, underscoring that the current high-growth phase is not a temporary spike, but a multi-year trend driven by fundamental demographics and supply failure.

3. Lower levels of home ownership

The long-term trajectory for the overall Australian home ownership rate is likely to continue its gradual decline over the next decade.

While the national rate has hovered between 67% and 70% since the 1970s, this stability is heavily propped up by the older generations who own their homes outright.

As the baby boomer cohort eventually moves out of the system, their high ownership rates will be replaced by younger generations (Millennials and Gen Z) whose ownership levels are historically low.

Home ownership among 25-34 year-olds has already plummeted from over 60% in the 1970s to around 50% or less today, setting the stage for the overall national rate to slip toward the 63-65% range by 2036.

The key drivers of this decline—high house price-to-income ratios and long deposit-saving times—are structural and not easily reversed.

This decline will occur despite, and sometimes because of, the various government grants and schemes designed to assist first-home buyers.

My view is that demand-side measures like FHB grants and stamp duty concessions primarily benefit those already close to buying by bringing forward their purchase, rather than opening up home ownership to genuinely excluded households.

Critically, in our supply constrained markets, these grants add immediate demand into the entry level segment, which leads to increasing property prices for the very homes FHBs are targeting.

The result is an initial surge in FHB activity, as seen with the expanded Home Guarantee Scheme, followed by an eventual return to the long-term trend, where the gap between those with family financial support (generational wealth) and those without continues to widen.

This points to the permanent rise of a "rental generation" for whom long-term renting will be the dominant tenure.

4. Household size will increase

According to the census, household size is increasing, and over the next decade, we’re likely to see more multi-generational clans living together as continued multiculturalism, rising house prices and an ageing population lead to an increase in the number of households that see children, parents and grandparents living under the one roof.

Plus, the mix of overseas arrivals has changed, with more migrants now coming from countries with large family units.

However, falling birth rates mean that the proportion of younger age groups in our population will continue to shrink in the coming decade, while the share of older groups will rise rapidly.

5. More single households

At the other extreme, there will be an increase in those living as a couple or alone as more of us live longer and live alone longer, especially women over 60 years; and sadly, most will have limited financial means.

6. Increased Urbanisation and High-Density Living.

As population growth continues, there will be a trend towards urbanisation and high-density living, with a focus on apartment living and mixed-use developments.

The cherished dream of owning a quarter acre block with enough space for a game of backyard cricket will be nearly gone, with more of us trading backyards for balconies and courtyards.

In line with more of us living in medium density developments, urban areas will undergo significant redevelopment, focusing on creating more liveable, sustainable, and pedestrian-friendly environments.

7. Many of the jobs we know could disappear in the next decade

And there will be a casualisation of the workforce.

Some local jobs will be lost to offshore outsourcing, while others will be replaced by artificial intelligence.

Now I’m not suggesting that this will lead to mass unemployment; instead, it will lead to redeployment as a range of new occupations that we haven’t even thought of yet will come to light.

At the same time, more of us will be working a range of casual or part-time jobs, and as part of this trend, more oldies will be working than in previous generations.

They will be doing so, because they have to financially, rather than because they want something to do.

8. Most Baby Boomers will have retired by the end of the next decade

And Gen X’s will be coming up to retirement age.

Gone will be the oft-promoted image of Australian retirement as a happy couple walking along a beach at dawn or dusk.

It will be replaced by the reality of weathered hands still working, as many Baby Boomers will not have enough savings or superannuation to see them through their golden years.

There are about five million people born between 1946 and 1964, and they are jumping into the space previously occupied by pre-boomers (born 1927-1945), who never numbered more than three million.

This means the pension and health care system just won’t be able to cope with the avalanche of Baby Boomers careening into retirement.

As life expectancy increases, it will be necessary to push out the “official” retirement age and the age when the pension or health care benefits kick in.

Across the world the average age of retirement generally starts at 65, but already many countries, including Australia, are pushing this to 67 or 68.

At the same time these trends will ensure that Australia keeps importing more migrants of working age to keep paying taxes to support the retired Boomers.

9. Development of a new set of “tribes”

As always, demographics will drive our property markets, but increased high-density living, migration, multiculturalism and technological advancements are among the social changes that will lead to the development of a new set of “tribes”. These will include:

• Social singles - it is predicted that by 2030, more than 26% of Australians will be living in single-person households.
• Multigenerational clans - Continued multiculturalism and changing age demographics within the Australian population are tipped to increase the number of households that see children, parents and grandparents living under the one roof.
• Homework tribes - It is possible that one in three people will be employed on a freelance basis by 2030. This trend emphasises the an increasing need for at home workspaces as well as more spaces for communal work.
• Peter Pans - these are the Baby Boomers, many of whom will now be retired but want to live independently at home longer. They will not be looking for sea change, tree change or retirement villages, but will want to spend their golden years in the familiar locations, enabling them to continue enjoying their lives close to their families and friends.

10. We will be inundated with new technology we haven’t even dreamed of yet

There is likely to be increased use of technology in real estate transactions.

I can foresee advancements in technology streamlining property transactions, with AI, blockchain, and virtual reality becoming integral in property viewings, transactions, and management.

At the same time, we’ll likely become a cashless society and even credit cards could disappear in the next 10 years.

Our cities would look very different but what wouldn’t change is that Australia would remain the best place in the world to live and we’d with a queue of people clamouring to live here.

What does this mean for you as a property investor?

In the medium term, our property markets will be underpinned by 3 factors:

1. A significantly growing population
2. Strong jobs creation
3. Increasing the wealth of our nation.

I see the current market offering a window of opportunity for property investors with a long-term focus.

You see… we are working through a property super cycle, a period of strong price growth that will last for a number of years.

Taking advantage of this stage of a property has created significant wealth for investors in the past.

Moving forward, demand is going to outstrip supply for some time to come as we experience record levels of immigration at a time when we’re not building anywhere as many properties as we require.

At the same time, the cost of construction of delivering new dwellings will keep increasing, not only because of supply chain issues and the lack of sufficient skilled labour, but also because builders and developers will only commence new projects if they are financially viable, and new projects will need to come online at considerably higher prices than the current market price.

Buyer and seller sentiment is likely to remain strong as greed (FOMO) overtakes fear (FOBE - Fear of buying early), as it always does as the property cycle moves on.

We are also going to be experiencing a prolonged period of strong rental growth - the rental crisis will only worsen further, with no end in sight.

Now, I'm not suggesting taking advantage of tenants; what I'm suggesting is that we recognise there is currently a problem (a lack of rental accommodation) and provide a solution.

So rather than trying to hunt down a bargain, focus on buying an investment-grade property in an A-grade location because these types of properties are in short supply but are still selling for reasonably good prices… Plus, they’ll hold their value far better in the long term.

While it might feel counterintuitive to buy at a time when there are so many mixed messages in the media, you can benefit from less competition, low consumer sentiment, minimal downside risk and minimal risk of oversupply.