Key takeaways
Buyers are becoming more selective. Flexibility, functionality, lifestyle and space are increasingly shaping purchasing decisions.
Buyer priorities vary significantly between cities. Sydney wants versatility, Melbourne values character, Brisbane seeks flexibility, Perth prioritises space, Adelaide focuses on practicality and Canberra favours fundamentals.
Homes increasingly need to work harder. Granny flats, dual living, studies and adaptable spaces are becoming more desirable.
Australia is experiencing multiple property cycles. Sydney and Melbourne have seen listings retreat, while stock levels are increasing across Brisbane, Adelaide and Perth.
For investors property selection matters more than ever day . Well-located, scarce and highly liveable properties should remain attractive to future owner-occupiers.
For years, we’ve talked about Australia’s property market as though there were one type of buyer responding to one set of conditions.
Interest rates rise, borrowing capacity falls, affordability deteriorates and buyers supposedly react in much the same way.
Of course, property markets don’t work like that.
Australia is made up of hundreds of individual property markets, and buyers in Sydney are facing very different circumstances from those in Perth, Brisbane or Adelaide.
More importantly, the latest search data suggests buyers are becoming increasingly deliberate about the type of home they want and the lifestyle they expect it to provide.
Domain’s latest Spring Quick Take identifies six distinct buyer “personalities” across our capital cities.
Its analysis of search behaviour suggests that while affordability remains important, buyers are increasingly concentrating on flexibility, functionality, lifestyle and space.
As Domain puts it, “This spring isn't being defined by what buyers can afford; it’s being defined by how buyers want to live.”
I think that tells us something important about where our housing markets are heading.
Buyers are becoming more discerning
The old Australian dream of a detached home on a large block hasn’t disappeared, but it is evolving.
Smaller households, changing family structures, working from home, higher housing costs and changing lifestyle expectations mean buyers increasingly want their property to work harder for them.
And Domain’s data shows how differently this is playing out around the country.
Sydney buyers have been labelled “The Optimiser.”
Pools, waterfront homes and views remain popular, but granny flats, studies and dual-living arrangements have become increasingly important.
Compared with five years ago, searches have shifted away from balconies and gardens towards dual living, garages and ground-floor homes.
In other words, Sydney buyers still want lifestyle, but they also want greater utility from every square metre they are paying so much for.
Melbourne buyers are somewhat different.
Domain calls them “The Romantic”, and that seems appropriate for a city where character and neighbourhood amenity have always mattered. Buyers continue searching for pools, garages, courtyards and studies, but art deco, heritage and warehouse properties also feature strongly.
Domain says Melbourne buyers remain attracted to “homes with a story”, provided those properties also meet the practical requirements of modern living.
That combination of scarcity, character and amenity is worth noting because these are characteristics that cannot easily be replicated by adding another housing estate on the urban fringe.
Brisbane and Perth buyers want their homes to do more
Brisbane’s buyer has been labelled “The Multigenerational Buyer”, reflecting growing interest in properties capable of serving several purposes.
Pools remain the most searched feature, but dual living, granny flats and duplexes are prominent, alongside sheds and garages.
Domain suggests this points towards buyers seeking homes suitable for extended families or additional income opportunities.
This makes sense when you consider the demographic and affordability changes occurring around us. Adult children are staying at home longer, ageing parents may need accommodation closer to family, and housing costs are encouraging households to think differently about how their property can be used.
Meanwhile, Perth buyers are “The Space Seeker.”
Pools, granny flats, land, workshops, sheds and dual-living opportunities dominate searches, while land and dual living have climbed the rankings over the past five years.
Interestingly, Perth also stands apart on the supply side. According to Domain, it was the only capital analysed where every area recorded annual growth in new supply, while total stock also increased strongly in markets including Mandurah, Bayswater-Bassendean and Canning.
Adelaide buyers are becoming pragmatists
Adelaide’s housing market has experienced substantial growth over recent years, so it’s hardly surprising that buyers there are becoming increasingly conscious of value.
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Domain calls Adelaide buyers “The Pragmatist.”
Searches increasingly favour practical features such as sheds, granny flats, studies and new homes, while solar, ensuites, dishwashers and corner blocks have entered the top ten compared with 2021.
Yet buyers haven’t abandoned character, with “stone” also appearing among popular searches.
This reflects something I’ve observed repeatedly over many property cycles. When affordability becomes stretched, buyers don’t necessarily disappear.
Instead, they become more selective about what they are prepared to pay for. They still want good properties in good locations, but compromises become more considered.
Canberra buyers are returning to fundamentals
Canberra provides another interesting contrast. Domain describes its typical buyer as “The Fundamentals Buyer.”
It is the only capital in the study where views have overtaken pools as the most searched feature, while courtyards, separate-title homes, north-facing properties and ground-floor living have all become increasingly popular.
Searches for views, separate title, ground-floor living and north-facing properties have risen since 2021, suggesting greater attention to long-term liveability.
And there is a broader lesson here for property investors. Owner-occupiers make up the bulk of Australia’s property market, so understanding what they value matters enormously.
Remember, as an investor you may buy a property today, but eventually you're likely to sell it to another investor or, preferably, an owner-occupier prepared to pay an emotional premium for it.
That means successful investing involves looking beyond today's rental return and asking what future buyers will want from that property.
Australia is also experiencing several property cycles at once
Perhaps the most interesting part of Domain’s report is what is happening to supply.
Sydney and Melbourne, where market conditions have softened, have experienced some of the sharpest falls in new listings.
Domain suggests some vendors are choosing to wait rather than sell into weaker conditions. Brisbane, Adelaide and Perth are experiencing something different, with new listings generally remaining higher and total stock increasing, giving buyers more choice.
This reinforces something regular readers will have heard me say many times: there is no single Australian property market.
Different cities are moving through different stages of their property cycles, and even within those cities there are significant differences between suburbs and property types.
Rising stock may reduce some of the scarcity that supported rapid price growth in certain markets, while constrained listings in other locations could help place a floor under prices despite softer demand.
Domain’s methodology is also worth keeping in mind. Its analysis covers the three months to August and uses Domain sale listings for keyword searches and average views per listing, while its supply measures cover market-wide house and unit listings.
So search behaviour is a useful indication of buyer intent rather than a guarantee of what buyers will ultimately purchase.
What does this mean for property investors?
I see an encouraging message in these figures.
Buyers haven’t suddenly stopped caring about property. Instead, they are becoming more thoughtful about what they buy.
They want homes that accommodate changing families, provide space to work, offer flexibility, deliver lifestyle benefits and remain useful through different stages of life.
For investors, that makes property selection even more important.
Over the years ahead, I expect the gap between investment-grade properties and secondary properties to become increasingly obvious.
Generic dwellings in locations with abundant interchangeable supply will have to compete harder for buyers, while well-located properties with scarcity, liveability and the features future owner-occupiers value should remain in stronger demand.
Markets will continue to cycle, interest rates will change and buyer confidence will rise and fall. Yet people will still need somewhere to live, and they will continue competing for the relatively small number of properties that genuinely meet their needs.
That is why I remain optimistic about the long-term prospects for well-selected Australian residential property.
The opportunities will still be there, but increasingly they will belong to investors who understand that the property market is becoming more discerning, more fragmented and more focused on the quality and usefulness of the home itself.
