2025 in Review: Where the Market Stands Now
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Across Australia, rents have increased in recent years, creating a competitive rental market with strong demand.
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In NSW, rental demand remains high, giving property owners opportunities to maximise returns.
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In VIC, while affordability pressures have grown, rentals are still relatively more accessible compared with some other states, maintaining good opportunities for investors.
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With strong demand and limited supply, house and unit prices are forecast to continue rising into 2026.
This backdrop makes 2026 a pivotal year. For landlords, investors, and short‑stay owners, there are exciting opportunities to capitalise on the market while staying strategic and informed.
Air Design stay in Horsefield Bay, NSW
What Forecasts Say for 2026: Prices and Rents to Keep Rising
| Metric | What to Expect in 2026 |
|---|---|
| Property values (houses & units) | Houses nationwide likely to see increases, with units (apartments/townhouses) especially seeing uplift due to affordability pressures. |
| Rents in major capitals (houses & units) | Rents expected to rise again. For example, one forecast predicts median weekly asking rent in Sydney could reach ~AU$815, Melbourne ~AU$595. |
| Demand vs Supply | With persistent undersupply and steady demand (population growth, migration, long‑term rental pressure), tight rental markets may continue. |
Key takeaway for owners and investors: Properties that are well positioned in good areas, well maintained, suitable for long‑term or short‑term stays may benefit from both capital growth and rental demand in 2026.
What This Means for Rental & Investment Properties
If you own a short‑term rental or holiday‑home, 2026 could offer a favourable environment.
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As long‑term rents rise and long‑term rentals become less affordable, more people may turn to flexible or short‑stay options — for relocation, travel or temporary stays.
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Investors may become more interested in units (apartments, townhouses) because they remain more affordable than houses, which may increase supply, but well managed short‑stay units may stay in demand.
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For property managers, this could mean an opportunity to highlight the benefits of short‑stay management: flexibility, higher yield potential, and professional oversight.
Checklist for Property Owners and Managers
Use this checklist to assess and prepare your rentals for 2026:
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Review current rental yield vs expected maintenance/operating costs for 2026 — are you still profitable if rents rise or if you switch a property from long‑term to short‑stay?
✨ With Air Design managing your property, switching between long‑term and short‑stay options is simple and stress-free. We handle everything from listing and guest communication to cleaning and maintenance, so you can maximise your rental income without the extra workload.
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Consider converting underused or lower-yield long‑term rentals into short‑term/holiday home stays if location and regulation permit.
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Stay informed about local rental laws and regulations (state, council, strata). Compliance will matter, especially as demand and scrutiny increase.
✨ With Air Design, you won’t need to worry about keeping up with every regulation change. We stay on top of all NSW and VIC rental laws, short-stay rules, and strata requirements, ensuring your property is always fully compliant.
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Keep flexible pricing strategies. With shifting demand, you may benefit from dynamic pricing (e.g. seasonal, peak demand, events) to maximise occupancy and returns.
Air Design stay in Horsefield Bay, NSW
What to Watch in 2026: Risks and Variables
While the outlook is generally positive for property owners, some factors could change the picture:
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If new construction ramps up and supply increases significantly, property value growth and rent pressure could ease.
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Slower population growth or reduced migration could ease demand for rentals.
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Economic conditions — interest rates, cost of living, wages — could affect tenants’ ability to pay, or investors’ appetite for buying.
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Changing regulations or tenancy laws may impact short‑stay rentals or investment viability.
How Air Design Can Help
At Air Design we understand how fast the market moves. We manage both short‑term and long-term rental properties with a focus on maximising yield while keeping compliance, maintenance and guest satisfaction as priorities.
If you own property in NSW or VIC and you are curious what 2026 might hold, or if you want to explore switching between long‑term and short-term rentals, we can help.
