Key takeaways
Existing property owners are benefiting from substantial equity gains and are largely shielded from rising interest rates.
Renters and first-home buyers are struggling as property values surge, making home ownership feel increasingly out of reach.
Owners are playing an entirely different game, they’re leveraging their equity, not saving from scratch.
Let’s be honest: Australia is becoming a two-speed society when it comes to housing.
On one side, you have property owners sitting on a mountain of equity, largely untouched by rising interest rates, with the means and confidence to keep upgrading, investing, and helping their children into the market.
On the other hand, you have aspiring first-home buyers and renters, watching prices surge even further out of reach, wondering how people are still able to afford to buy, let alone bid hundreds of thousands over reserve at auctions.
If you’ve ever asked, “How can people keep pushing up property values in this economy?” you’re not alone.
But here’s the reality: those who already own property are playing a very different game than those who don’t.
And that growing equity base is not just propping up the market, it’s driving the next leg of price growth.
Let’s talk about the real money: Equity
According to CoreLogic, homeowners across the country are now sitting on unprecedented wealth.
The total Australian Real Estate market is valued at $11.4 trillion, and there is only $2.4 trillion worth of debt against it.
The median value of Australian dwellings is over $831,288, but in Sydney it’s over to $1.2 million.
With most Australians having bought their homes five, ten, or even twenty years ago, and the majority still on 25- or 30-year P&I loans, their outstanding debt is significantly lower than current home values.
Even if you bought just five years ago and prices have only risen modestly in your area, chances are you’ve got hundreds of thousands in usable equity.
That’s your personal war chest.
It can be used to:
- Upgrade to a more desirable home,
- Right-size into something more suited to your lifestyle (perhaps releasing equity in the process),
- Or, as is increasingly common, help your kids into the market via the Bank of Mum and Dad.
The Bank of Mum and Dad is now one of the biggest forces in the market
It’s no secret that parental help is a key enabler for first-home buyers.
What’s changing is the scale.
As affordability tightens and lending restrictions remain in place, more and more young buyers are relying on family equity to get into the market.
This might mean:
- A parental guarantee on a loan,
- A direct cash gift or early inheritance – commonly called Give While You Live,
- Or even mum and dad buying the first property in their own names, with a plan to transfer ownership down the track.
The point is that equity is being recycled.
It’s not sitting idle.
It’s being mobilised to amplify property demand, especially in the $700K – $1.2M price brackets in our capital cities, where many first-time buyers are looking.
Those already in the market are playing a different game
Our experience at Metropole shows that the people bidding at auctions today are not new entrants.
They’re typically:
- Existing homeowners with large equity buffers,
- Investors using equity to leverage into their next property,
- Or downsizers buying mortgage-free.
According to PEXA, in 2023, 28.5% of residential property sales in New South Wales, Victoria, and Queensland were purchased without a mortgage.
This equates to $129.6 billion worth of property purchased with cash.
Clearly, these buyers are far less sensitive to interest rates than the average would-be first-home buyer.
They don’t need to save a deposit from scratch.
They’re not borrowing 95% of the purchase price.
And they don’t panic when the RBA hikes rates by 25 basis points.
In short, they’re not stretching, they’re reallocating.
They’re simply shifting the wealth they already have into the next stage of their property journey.
This gives them a significant competitive advantage, and it explains why prices continue to rise even when the macroeconomic environment appears hostile.
- Also read:Adelaide housing market update | July 2025
- Also read:Sydney housing market update | July 2025
- Also read:Melbourne housing market update | July 2025
- Also read:Perth housing market update | July 2025
- Also read:Melbourne property market forecast for 2025 | Is it a good time to invest in Melbourne?
Why prices can still go higher, even from here
Contrary to the doom-and-gloom crowd, there’s actually a logical, sustainable reason property prices keep rising:
- Limited new supply. Building approvals are down. Construction timelines are blowing out. Developers aren’t rushing to build new stock.
- Immigration-driven demand. Australia is absorbing record population growth, with most new arrivals looking to initially rent and then eventually buy.
- Equity recycling. As discussed, existing homeowners are recycling their wealth and outbidding newcomers.
- Wage growth at the top end. High-income earners, particularly professionals and dual-income households, are still in a strong financial position, and they’re competing for the best-located homes.
These factors create a self-reinforcing cycle: equity drives demand, which drives prices, which builds more equity.
Unless you’re in the game, it’s getting harder to catch up.
The real divide: Owners vs Non-Owners
Let’s call it what it is: the biggest wealth divide in Australia today is between those who own property and those who don’t.
It’s not just about what you earn anymore.
Two households earning similar incomes can have vastly different financial futures, depending on whether they bought property five years ago or missed out.
That’s why renters feel stuck.
They’re not just paying higher rents; they’re watching the ladder they’re trying to climb keep rising faster than they can reach.
Meanwhile, homeowners can:
- Tap equity to invest,
- Use redraws and offsets to navigate cost-of-living pressures,
- Or give their kids a head start, compounding generational wealth.
It’s a powerful and growing advantage.
Why this matters for investors and upgraders
If you’re already in the market, now is a smart time to think about how you can use your equity strategically.
Ask yourself:
- Can you leverage equity to buy an investment-grade property?
- Is now the time to right-size or move into your forever home before prices rise further?
- Could you help your children get into the market before the gap widens again?
I’m not suggesting recklessness, but standing still in this market is also a risk, especially when others are using their equity to accelerate forward.
As always, property is a long-term game. But if you’re already in, you’ve got an edge. The key is knowing how to use it wisely.
However, if you’re not in the market yet, it’s not too late
If you're not in the property market yet, it's not too late, but the window of opportunity may not stay open forever.
While it can feel like you’ve missed the boat, history shows that the best time to buy property was often “years ago”, but the second-best time is usually right now.
The key advantage first-time buyers and newcomers have is time.
Time to ride the next property cycle. Time for compound capital growth to work in their favour.
And time to build equity that can help them make their next move in five, ten, or twenty years, just like the seasoned owners are doing it today.
Currently, many potential buyers are sitting on the sidelines, spooked by the headlines of short-term uncertainty.
But smart investors and first-home buyers know that property booms are born during times of pessimism and confusion, not euphoria.
With the market still in a more balanced phase and competition from other buyers relatively lower, there’s a narrow window to buy before the next wave of demand kicks in.
And we know what’s coming: in early 2026, the federal government’s new shared equity scheme and first homebuyer support measures will take effect, likely unleashing a fresh surge of buyers into the affordable segments of the market.
That will mean more competition, rising prices, and ironically, fewer opportunities.
So if you're in a position to take the plunge, or even just get advice and start planning, now is the time to act strategically.
Don’t wait for the market to “feel safe.” By then, the best deals will be long gone.
Fact is, the smart money is already on the move.
But what about you?
Are you clear on how to take advantage of these market conditions — or are you still waiting for "certainty"?
That’s where our Complimentary Wealth Discovery Session comes in. We’re offering you a 1-on-1 chat with a Metropole Wealth Strategist to help you:
- Clarify your financial goals
- Understand how macro trends affect your position
- Build a personalised, data-driven property strategy
- Get ahead of the curve, before everyone else piles in
There’s no cost, no obligation, just practical, tailored guidance based on decades of experience.
Click here now to book your free Wealth Discovery Session.
