Wait or strike? Investors weigh opportunity amid market uncertainty

Property investment is considered, by many investors, a long-term prospect. This is the way capital gains have historically been maximised.

But short-term volatility can cloud the long-term picture. In the world right now, volatility is the norm.

War in the Middle East is creating a highly dynamic economic environment domestically.

Perhaps most importantly, and urgently, is the threat of recession. Whether a recession is likely or not, the potential for one has certainly increased significantly in recent weeks and months.

For property, the heat has come out of the market. Prices on the whole have plateaued, declining slightly in some areas, as buyers take a more discerning approach against the backdrop of economic, and interest rate, uncertainty.

Where does this leave an investment property purchase? Many will understandably hit the pause button and take a wait-and-see approach.

But some may be attracted to the opportunity to zig when others are zagging. To strike while competition is subdued.

Auction clearance rates in Sydney are in the 50 per cent ranges. Competition hasn’t been this subdued for a while and the balance of power appears to lie with purchasers at the moment.

And while prices have stalled, rents have not.

Cotality data shows that rents nationally increased 2.1 per cent over the three months to March, following a 1.2 per cent increase in Q4 2025. Year-on-year, the acceleration is more apparent: rents rose by 5.7 per cent in Q1 2026 over the prior year.

Sydney remains the most expensive city for renters, with the median rent up 5.9 per cent year-on-year to reach $824 per week in March 2026. To save for a deposit in these circumstances is incredibly difficult for many people.

The supply solution needed to put downward pressure on rents has not materialised in any meaningful way. Vacancy rates remain well below what is considered healthy.

Is it a good time to buy property?

For those with the financial capacity to invest, with rents at these levels, returns on investment are strong.

So is it a good time to buy?

There is no right answer.

Purchasing a property must always consider, above all, the purchaser’s individual circumstances. In the current climate, this will mean taking a calculated and conservative view of current and future borrowing costs.

The Reserve Bank meets again early next month.

It’s reasonable to assume there’s more water to flow under the bridge economically before anyone can form a strong view of which way the cash rate is heading.

While the long-term view of residential property is, and has always been, positive, forming a clear short-term view of what lies ahead is next to impossible at the moment.