Flexibility and focus take centre stage for investors

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As investors face a changing property market, CommBank is helping them adapt – offering strategies, lending solutions and insights to navigate regional shifts and new risks

IMAGINE IF Google Maps didn’t update – people would venture into new areas with outdated maps and quickly lose their way. And yet, many investors in today’s property markets are effectively at risk of doing exactly that. The routes they relied on during years of low rates and fast urban growth no longer guarantee safe arrival. To stay on course, investors need a current and reliable guide to a landscape that has shifted beneath their feet. After years of chasing rapid gains in booming city markets, Australian property investors are stepping into a new phase – one shaped by steady interest rates, shifting regional preferences and a sharper focus on long-term resilience. Old landmarks are fading or gone. New opportunities – and new pitfalls – are emerging in places many investors once overlooked. With regional areas attracting a surge of interest and servicing costs demanding deeper financial scrutiny, success now hinges on strategy over speculation. Experts point to diversification, personalised financial planning and flexible borrowing options as critical to navigating today’s more unpredictable environment. Lenders and brokers are adapting too, developing products and partnerships aimed at helping investors chart a smarter, more sustainable path through Australia’s evolving property markets.

At CommBank, we’re focused on giving our brokers more confidence in CommBank and delivering an exceptional experience for them and their customers. We are doing this by being reliable, transparent, accessible and adaptable. Our strategy has been designed based on broker feedback and focuses on how we can improve the experience and build a strong and more sustainable third party banking channel. If you’re not already accredited with CommBank, now is a great time to join us as we’ve simplified our accreditation process. Head to www.commbank.com.au to find out more. If you’re already accredited with CommBank, check out our 24/7 training hub – it’s all part of our commitment to giving you more confidence to build your business and deliver an exceptional homebuying experience to customers.

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Migration patterns by state

60%

“Regardless of what happens in the property market over the next 12 months, there is never a bad time to be considering your property options”

Baber Zaka, CommBank

The Australian property investment scene continues to evolve with notable shifts in regional preferences. Urban centres maintain their traditional allure with steady property value appreciation, but areas beyond major cities have gained significant attention. “Remote work arrangements and lifestyle priorities have driven increased competition and rising property prices in regional and coastal markets,” says Baber Zaka, general manager for third party at CommBank. While the number of remote workers is below the high of 40% of employed Australians recorded in 2021, this figure had only declined to 36% as of August 2024, making the potential pool of people able to live in the regions substantial. One barometer of this trend is the Regional Movers Index, developed by the Regional Australia Institute in partnership with CommBank, which consistently shows a preference for moving to the regions over city living. While there are variations in migration patterns around the country, the latest report for the December quarter shows that, overall, 32.2% more people moved from capital cities to regional areas than back in the opposite direction.

At the same time, average property prices in the regions are rising faster than in capital cities: CoreLogic’s latest Housing Chart Pack shows dwelling values for combined regions were up 5.3% in the 12 months to March, versus dwelling values for combined capitals, which grew by 2.8%. These geographic trends represent both opportunities and challenges for investors exploring markets outside traditional investment zones. Property values in some regional areas have seen unprecedented growth, though questions remain about its sustainability.

Servicing costs have emerged as a primary consideration for property investors across Australia, requiring more rigorous financial analysis than in previous market cycles. “Investors need to thoroughly assess their financial capacity and the long-term sustainability of their investments,” Zaka explains. “Tax implications and politically driven changes add an additional layer of unpredictability, influencing market stability and investor confidence.” The combination of these factors makes comprehensive due diligence essential. Experienced investors are adapting by developing more flexible investment approaches that can withstand potential market volatility. Interest rate considerations have become central to investment planning, with borrowers weighing fixed versus variable rate options carefully. “While locking into a fixed rate loan will provide more consistent repayment terms and protect investors against potential rate fluctuations, a variable rate investment loan could potentially deliver savings if rates come down,” says Zaka. This decision point highlights the importance of aligning borrowing strategy with individual financial circumstances and investment horizons. No single approach suits all investors, particularly in a period of economic uncertainty.

The current environment demands a more personalised approach to property investment than simply following general market trends. “Before making any decisions, it’s important for investors to understand their finances, needs, goals and long-term strategy,” Zaka says. “Diversifying their portfolio to balance risk, and incorporating flexible financial strategies, can enhance their ability to navigate the market effectively.” Lenders have recognised this need for customised solutions

and are developing products that allow for greater flexibility and risk management. Financial institutions have responded to changing investor requirements by offering solutions designed specifically for property investment scenarios. “We offer a range of products designed to meet the specific needs of property investors, including interest-only loans and our Property Share feature,” says Zaka. “Property Share allows customers to split the cost of buying a property with family or friends, while retaining individual control of their finances.” This co-ownership model addresses affordability challenges while providing entry points for investors who might otherwise be priced out of certain markets. Other product innovations reflect similar adaptations to current market realities. “We also have other product features, including our ability to provide customers with up to 99 offset accounts on eligible home loans,” Zaka adds. Educational resources have also become part of the lender toolkit for supporting investors. “We have recently launched our new Pathway to Property Investment series for brokers to send to their clients, designed to offer insights and guidance on making informed investment decisions,” says Zaka.

Signpost - a hand shows the business woman with pirate telescopes where to look. Compass. Business analytics and strategic.

Regional shifts create new opportunities

Understanding your financial position

Published 12 May 2025

“Brokers looking to expand their business in the property investment market should prioritise building strong, trust-based relationships with their clients”

Baber Zaka, CommBank

50%

40%

30%

20%

10%

-10%

NSW

QLD

TAS

VIC

Vacated capital city

Settled in regional area

Source: Regional Movers Index, December quarter 2024

Source: Treasury, Budget Paper No. 1 (2025–26)

Expected year-on-year growth in dwelling investment 2025–26

Dwelling investment expected to rise

+5.5%

Expected year-on-year growth in dwelling investment 2026–27

+7.5%

Risk assessment critical in current climate

As property investors adapt to new market realities, the relationship between investors, lenders and brokers becomes increasingly important. Those who focus on education, personalisation and long-term planning are best positioned to succeed regardless of short-term market movements.

Broker opportunities in property investment

Despite current challenges, economic indicators suggest conditions will improve for property investors over the coming year. “Looking ahead, many economists are predicting that real household disposable incomes will increase, consumer sentiment will improve, and further interest rate cuts will occur – all of which is working together to create a positive outlook for the future for all buyers,” Zaka points out. The Treasury predicts that lower inflation, continued employment growth, higher wages, tax cuts and lower interest rates will support an 8.75% lift in real household disposable income by 2026–27 compared to 2023–24. Dwelling investment is also expected to grow over this period.

This optimism comes with practical advice for those considering entering or expanding their presence in the property market. “Regardless of what happens in the property market over the next 12 months, there is never a bad time to be considering your property options,” says Zaka. Expert recommendations focus on fundamental investment principles rather than market timing. Conducting thorough research, assessing long-term property viability and maintaining diversified holdings remain essential practices regardless of market phase.

Positive outlook despite uncertainties

For mortgage brokers, the current property investment environment presents significant business development potential when approached strategically. “Brokers looking to expand their business in the property investment market should prioritise building strong, trust-based relationships with their clients,” says Zaka. “By taking the time to thoroughly understand the individual needs, goals and concerns of each customer, brokers can offer personalised advice and guidance that aligns with their clients’ investment strategies.” This emphasis on relationship-building reflects the increased complexity of investment decisions in the current market. Brokers who position themselves as knowledgeable advisers rather than simply loan facilitators can create sustainable business growth.

“Effective communication, active listening and responsiveness are key to fostering long-term partnerships,” Zaka explains. “Brokers should stay informed about market trends and changes to provide clients with timely, relevant insights that help them make informed decisions.” This consultative approach helps differentiate brokers in a competitive marketplace while addressing the genuine need investors have for qualified guidance. “Demonstrating a genuine commitment to their clients’ success will not only help brokers differentiate themselves in a competitive market but also build a loyal customer base,” says Zaka.

Capital city net outflows and regional area net inflows

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