Key takeaways
The property market is adjusting, not weakening, as key drivers shift while others remain in place. Short-term data like auction results can be misleading without context.
Migration is slowing from its peak, but still remains historically high. This means housing demand will moderate, not disappear.
Population growth is uneven, with Sydney and Melbourne still absorbing strong overseas migration. This continues to support housing demand in these key markets.
Supply remains constrained due to high construction costs and development challenges. This creates a structural floor under property prices.
The market is moving into a phase of steadier, more selective growth. Investors need to focus on quality assets and local fundamentals rather than broad trends
There's a lot of noise in the property market right now, and most of it is coming from people who are either reading the data too quickly or using it to make a political point.
The auction clearance rates came in softer this week across most cities, and a number of commentators are treating that as a warning sign.
But when you understand what's actually driving those numbers - Easter, school holidays, and thin listing volumes - the picture looks quite different.
Meanwhile, the migration debate continues to dominate the political conversation, and again, much of the commentary is missing what actually matters for property investors.
While the public debate is still focused on a so-called surge, the data shows that annual net migration has already started to ease from its peak, which has important implications for future housing demand
As you watch this week's Property Insiders chat, with Australia’s leading housing economist, Dr Andrew Wilson, you'll find that what we’re seeing isn’t a market running away in one direction.
Instead, it’s one that’s adjusting. Some of the key drivers that fuelled the last phase of growth are beginning to shift, while others remain firmly in place.
That’s creating a more balanced, but also more complex environment, which is why relying on simplistic narratives can be dangerous for investors.
Migration is easing, but it still matters
Watch this week's Property Insider video as Dr Andrew Wilson and I discuss the latest migration figures, which have become the go-to explanation for housing pressures.
There’s no doubt that strong population growth has added to demand over the past couple of years, but the latest figures show that net overseas migration has already begun to ease from its peak.
Net overseas migration came in at 306,000 people for the 2024-25 financial year, down from 429,000 the year before and well below the record of 538,000 in 2022-23.
So the post-pandemic surge is clearly unwinding, and it's been doing so for two years now.
Despite claims of out-of-control migration continuing to grab headlines, net overseas migration has been falling by around 100,000 per annum, and it can be expected to continue falling at a moderate rate over the next two years.
Treasury now forecasts net overseas migration to slip further to 260,000 in 2025-26 before settling near 225,000 by 2026-27.
And that matters, because if migration growth slows, the rate at which housing demand increases will also moderate.
But let's be clear: easing population growth doesn't mean low population growth.
We’re still dealing with historically elevated levels of migration, so while demand pressures may not keep accelerating, they’re not disappearing either.
In other words, migration is shifting from being a tailwind that’s getting stronger to one that’s still pushing the market forward, just with less force.
But here's what matters specifically for property investors, and what the national debate consistently ignores.
The distribution of that migration across cities is very uneven. NSW and Victoria are absorbing the largest share of overseas arrivals - around 92,889 and 88,774 people respectively on a net overseas migration basis in the September quarter of 2025.
That sustained population inflow into Sydney and Melbourne creates an ongoing floor under housing demand in those cities, even as the headline migration numbers ease nationally.
The interstate migration picture adds another layer
Queensland continues to attract the strongest net interstate flows, at around 19,092 people, while NSW is consistently a net loser of interstate residents at -23,353.
Victoria is roughly in balance at just 441 net interstate arrivals, which puts it in a very different position to where the political narrative often places it.
The practical implication of all this is that the cities most people are worried about - Sydney and Melbourne - are still absorbing meaningful population growth through overseas migration.
And the cities politicians are suggesting people flee to for affordability - regional Queensland particularly - are already seeing that reflected in their prices.
Building costs keep rising
Of course, while demand is adjusting, supply continues to lag behind.
Construction costs remain significantly higher than pre-COVID levels, even though the rate of increase has slowed.
- Also read:Sydney housing market update | April 2026
- Also read:Melbourne housing market update | April 2026
- Also read:Australian housing market update | April 2026
- Also read:What the Auction Data Is Really Telling Us – And Why Migration Is Being Misread | | Property Insiders
- Also read:National Vacancy Rate Falls to 1% | SQM Research
Developers are still dealing with tight margins, feasibility challenges, and cautious lending conditions.
So even though we need more housing, the system isn’t producing it fast enough.
And that’s the structural issue that continues to underpin property values.
You can ease demand slightly, but if supply is constrained, prices don’t suddenly fall off a cliff.
The national house building costs index reached 164.1 in February 2026, up from 156.9 the month prior, and the annual growth rate is running at around 4.6%.
To put that in perspective, the same index sat at just 101.5 back in early 2021.
What this means is that the cost of building a new home has risen by more than 60% over the past five years.
That is an enormous shift, and it creates a structural floor under the value of existing dwellings that doesn't get talked about nearly enough.
When it costs this much to build, developers need higher sale prices to make projects viable, which keeps a lid on the supply response and puts ongoing upward pressure on the prices of what already exists.
For investors who own well-located established properties, this is a meaningful tailwind. The replacement cost argument for property - the idea that what you own would cost substantially more to rebuild today - is as strong as it has been in a very long time.
Auction markets steady after Easter with school holiday listings
Capital city auction clearance rates were steady following the Easter break; however listings were relatively low, reflecting the current school holiday period.
The national weekend auction market reported an average clearance rate of 64.3% over the past week, higher than the 57.7% reported the previous week and now also higher than the 58.7% reported for the same week last year.
Auction listings will continue to be impacted over the coming weeks by the distractions of the April school holidays.
What all this means for investors
When you bring all these factors together, a clearer picture starts to form.
Demand is moderating but not collapsing. Supply is constrained and likely to remain that way. And market activity is steady rather than weak.
That combination usually leads to a period of more measured growth rather than sharp rises or falls.
For investors, this is where strategy becomes critical.
This isn’t a market where you can rely on broad-based growth to do the heavy lifting.
Instead, the focus needs to shift to:
- buying quality assets in locations with strong, long-term fundamentals
- understanding local supply pipelines rather than just national trends
- taking advantage of opportunities created by uncertainty and mixed sentiment
Because when the market feels unclear, that’s often when the best opportunities are hiding in plain sight.
One of the biggest risks right now isn’t the market itself. It’s the commentary around it.
There’s a tendency for media narratives to swing between extremes, but property markets don’t usually move that way.
They evolve gradually, shaped by multiple forces moving at different speeds.
That’s why conversations like the one we have each week with Dr Andrew Wilson are so valuable.
They help cut through the noise and focus on what really matters.
Final thoughts
We’re not in a boom. We’re not in a bust. We’re in a transition phase.
And for experienced investors, that’s often the most interesting part of the cycle.
Because it rewards those who take the time to understand what’s really going on, rather than reacting to what they’re being told.
As always, the real story is in the data, not the headlines
If you want to get a clearer sense of where the market is heading and how to position yourself, why not have a chat with one of the wealth strategists at Metropole to understand how this affects you as a property investor? Click here now and lock in a time that suits you.
