If you have watched the property headlines lately, you have probably seen two conflicting stories. One says investors are vanishing from the market. The other says rents are climbing and renters are under real pressure. Both cannot be entirely true, and when you look at the actual data, the second story is the one that holds up. The first is a misreading of what is really happening.
Real estate commentator Tom Panos put it plainly in a recent post: several independent rental reports, built on different data and different methodologies, are all landing on the same conclusion. Rents are rising, vacancy remains critically low, and Australian renters are under sustained pressure. He also raised a fair question: if the evidence keeps pointing one way, does policy need to catch up?
Let’s separate the noise from what is verifiable, and look at what it actually means if you are trying to build a resilient property portfolio in 2026.
Two independent research houses, using different methods, are both telling a consistent story. SQM Research puts the national vacancy rate at 1.3% as of June 2026, up only marginally from 1.2% in May. Every capital city remains below 2%. Perth sits at 0.6%, Adelaide at 0.7%, Brisbane at 0.9%, Sydney and Melbourne at 1.6%, and Darwin, the tightest market in the country, at just 0.3%. SQM’s Managing Director Louis Christopher noted that while some monthly easing in asking rents is encouraging, localized rental inflation remains severe in a number of markets. Cotality, formerly known as CoreLogic, tells a similar story from a different angle. Its Quarterly Rental Review shows national rents rose 1.6% over the June 2026 quarter, taking annual rental growth to 5.9%. The median advertised rent across Australia has climbed to $705 a week. Over the past five years, rents are up more than 40%, adding roughly $204 a week to the typical tenancy. National gross rental yields also increased to 3.7% in June 2026, because rental growth is outpacing dwelling price growth in much of the country. Two firms, two methodologies, two different headline numbers. The conclusion is the same either way: the rental market is tight, and it has stayed tight for a long time. That is the verifiable part of Panos’s claim, and the data backs it up. Panos’s second reel argued that the market has not lost investors, it has changed who they are. Highly leveraged buyers who depended on negative gearing to make the numbers work are stepping back, he said, while equity-rich, experienced investors are quietly moving in, recognizing that softer prices combined with rising rents can be a genuinely good long-term setup. Here is what we can verify, and where his read is commentary rather than confirmed fact. What is verifiable: new investor lending is expected to fall sharply through 2026, with volumes tracking around half of late 2025 levels, according to CommBank’s economics team, who point to lower expected after-tax returns, tighter borrowing capacity, and a wait-and-see mood following the Federal Budget’s changes to negative gearing and capital gains tax. Price growth has also genuinely diverged by market. CBA now expects national dwelling prices to be flat over 2026, down from an earlier 3 to 5% forecast, with Sydney down 0.9% and Melbourne down 1.5% over the quarter to April 2026, even as national values were still up 9.8% for the full year. Momentum has clearly cooled in the two biggest cities, even where the annual figure still looks strong. What we cannot independently confirm: the specific claim that experienced, equity-rich investors are “quietly” stepping in while leveraged buyers retreat. That is Panos’s read from his vantage point as an auctioneer and trainer, and it is plausible given the lending and pricing data above, but it is interpretation, not a published statistic. We are presenting it as his view, not as established fact. What is consistent either way: the buyer who struggles most in this environment is the one who bought purely for capital growth on thin or negative cash flow, funded by a large, highly geared loan. Rising rates, a softer price outlook and a narrower negative gearing regime all squeeze that buyer at once. The buyer who is better positioned is the one whose asset pays for itself, regardless of what happens to the sale price down the track. This is where the two reels connect to a single, practical idea. When rents are rising and vacancy is near record lows nationally, cash flow becomes the thing that matters most, because tenant demand is doing the heavy lifting for you. When highly leveraged buyers are the ones under the most pressure, the properties that keep performing are the ones that were never dependent on aggressive gearing in the first place. A standard residential property targets a gross rental yield of roughly 3% to 5%. That is reasonable in a normal market, but where rates are elevated and price growth has stalled in the major cities, a 3 to 5% yield leaves you exposed. You are relying on capital growth to do most of the work, at exactly the point where capital growth has become the least reliable part of the equation. Purpose built property is built around a different equation entirely. ACIGP’s NDIS properties target yields of 10% to 15%. Co-living developments target 8% to 10%. Triple living properties target 8% to 10%. These are targets based on current market conditions, not guarantees, and we will never tell you otherwise. But the gap between those targets and a standard 3 to 5% yield is exactly the buffer that matters when rents are climbing and financing is tighter than it used to be. There are structural reasons this asset class holds up well in a rising-rent, low-vacancy environment specifically: If Panos is right that the market is quietly repopulating with equity-rich, experienced investors rather than genuinely emptying out, the buyers who do well from here will be the ones who are not betting the outcome on further price growth. They will be the ones whose properties are already paying them a strong income, in a rental market where SQM and Cotality both confirm demand still comfortably outstrips supply. That does not mean ignore price altogether, and it does not mean every purpose built property is a good deal simply because it targets a high yield. It means yield should be the number you interrogate first, not an afterthought behind the sale price and the suburb. In a market defined by tight vacancy and cautious, tighter lending, the property that pays you properly while you hold it is the one built for the conditions we are actually in, not the conditions of five years ago. ACIGP is a one-stop shop of accountants, brokers and builders with over 100 years of combined experience, building NDIS, co-living and triple living property across Victoria. We do not guarantee returns, and any figures we quote are targets based on current market conditions. What we can do is walk you through exactly how a specific asset’s income case stacks up against the market you are actually buying into today. This is general information only and not financial, tax or legal advice. Speak to a licensed adviser about your circumstances. Rents are rising, vacancy is tight, and lending to leveraged buyers is tightening with it. If you want to know what a yield-focused purpose built property could realistically return for your situation in this market, book a free Returns Assessment with the ACIGP team.