Australian Property Market Outlook with Cameron Kusher

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Rising Construction Costs: Civil and built-form construction costs have surged by 35% to 40% over the last five years. Driven by elevated diesel prices and global supply chain disruptions, these high costs are here to stay and continue to push up new home and land prices.
The 'Four-Speed' Property Market: Australia’s capital cities are performing counter-cyclically. Over the past five years, Perth prices doubled (+100%), Brisbane and Adelaide grew by over 80%, Sydney rose by just over 40%, and Melbourne grew by only 12%.
First Home Buyer Hurdles: The average age of a first home buyer has risen from 24 in 1975 to 41 today. This is driven by property prices surging 261% since the year 2000, while average salaries grew by only 114%, making saving for a deposit much harder.
The Long-Term Property Play: "Time in the market" remains far more critical than trying to "time the market." Property remains a long-term asset that historically appreciates despite geopolitical, inflationary, or interest rate cycles.
Housing Supply Bottlenecks: A critical undersupply of housing is being worsened by a lack of coordinated, bipartisan planning across federal, state, and local government levels, failing to match the infrastructure and housing demands of record migration.
State-by-State 5-Year Outlook: Southeast Queensland is forecast to grow by 35% to 40% as affordability tightens. New South Wales is seeing major opportunities in Western Sydney driven by the new Badgerys Creek airport infrastructure. Melbourne is predicted to experience strong double-digit growth in years three to five of the cycle once current excess stock is absorbed.
Interest Rates and Market Pick-up: One final 25-basis-point interest rate hike remains possible due to stubborn inflation. However, once rate stability is established, consumer confidence and market momentum are expected to pick up.

Brent: Welcome to the Live proud podcast. I'm Brent Hill. If you've had the news on lately and found yourself feeling a bit frozen about big financial decisions, well, you're not alone. We're living through genuine global disruption. Geopolitical uncertainties have triggered the biggest oil supply shock since the 1970s. Construction costs are rising, interest rates are doing their thing, and in the middle of all this are millions of Australians trying to work out whether now is the time to buy property or whether to wait for things to settle down. Today, I'm joined by Cameron Kusher, one of Australia's most respected property market strategists, with more than 20 years of data-driven analysis under his belt. We're going to cut through the noise, look at what's actually happening in the Australian market, both nationally and state by state, and get Cameron's honest read on where things are headed.

Cameron, thanks for being here. Really looking forward to this chat today. I thought if we can just set the scene as to where we're at: we're in the middle of a lot of geopolitical noise with the Iran war, the Strait of Hormuz closure, oil prices over $100, $110, depending on what day it is and what Donald's tweeted about the night before. Construction costs seem to be rising again through the inflationary effect that it's causing. How does all this actually flow through into the Australian property market today?

Cameron: Yeah, well, I think the big one we see is petrol prices. Unleaded prices have actually come down quite substantially, but unfortunately I drive a diesel car — and unfortunately, a lot of things that get transported across the country use diesel, and diesel prices are generally still around $2.30 to $2.40 a litre. So this really feeds into construction prices as well, because when you've got elevated diesel costs —

Brent: That's the key input, isn't it?

Cameron: It is. Moving things around the country is done by diesel, and it's really elevated, and that's putting cost pressures in there. Also, of course, having the Strait closed means that we can't get as many exports in, and we can't get our imports out as well. So we've already seen plumbing material prices go up quite substantially.

Brent: Toilet seats up 50% or something like that. I'll be more careful when I sit down there next time.

Cameron: So yeah, it's a small input, but the thing is, the longer this drags on, the more pressure there's going to be on prices. Because if diesel prices remain elevated, civil construction costs are going to increase. If the Strait remains closed, it's going to be harder getting materials to Australia, and that's going to put pressure on prices as well. So —

Brent: And we're seeing that at Frasers at the moment. Just those diesel inputs, which are about 20–25% of the civil cost. It's a flow-on effect. The civil contractor puts it onto our pricing that we've got to pay, and eventually that goes on to the consumer. So we are seeing even things like land — although it's quite basic, PVC pipes, etc. — that's all going up in value, and so are the civil costs. Even just standard land sites, we're seeing increase in cost just because of that flow-on effect. Naturally, we're going to see that in the built form as well, with apartments and townhouses.

Cameron: You would 100% think so. I think the challenge, though, is if prices start rising again — and there's already evidence in the official data that it's starting to rise again — you're coming off the fact that over the last five years those prices are already up 35 or 40%.

Brent: Construction costs, we're talking.

Cameron: Yeah, construction costs. So the question then goes: how much more can the consumer bear? Because as you said, that ends up flowing into the end price. In a lot of areas we've already got a situation where new housing stock prices are higher than existing housing stock prices, and if that gap narrows, it's going to be challenging for the market. Because we've already got very high inflation — we never really got inflation back under control — so the cost of everything is going up, and the ability for consumers to bear those higher costs is quite limited at this point, I think.

Brent: Yeah, but what you're actually saying is that the costs are here to stay, that the costs are going up, and evidently we're actually seeing property prices for new product increasing, which is interesting to see. It feels like we've been through a number of huge events over the last 10 years. We had COVID, which was a massive global shock to us. We're now seeing the Strait of Hormuz being closed, and the biggest oil disruption or energy disruption — they're saying 25% of the world's energy has basically stopped. That's causing some significant changes to our economy and the way we buy and the way we spend, but also to prices of goods, and property falls into that. We saw through COVID property prices skyrocketed. Are we going to see the same thing with this disruption?

Cameron: I don't think we will. We're already seeing in Sydney and Melbourne that property prices — and this is more reflective of established property prices — they're falling at the moment. The other capital cities, we're still seeing quite strong price growth, but we're starting to see that decelerate. This is mainly a function of the fact that interest rates — yes, they were at this level in late 2024, early 2025 — but you have to go all the way back to 2011 to see interest rates as high as they are currently. So anyone that bought from 2011 to about 2021 never knew anything but interest rates falling. We're going into a much more volatile period. We've obviously got much higher interest rates than we've had for most of the last 15 years, but I think we're going into a period where we see more volatility in interest rates. In terms of what this means for property prices, as I said, we're seeing established prices fall at the moment, and with interest rates higher for longer, and also some of the things we've seen in the budget, I think that is going to lead to a bit of a period of weaker price growth. What that's going to mean longer term, though, is that we're not going to be delivering enough new housing to what we need. We're already way behind the Housing Accord target that the federal government set, and if you're seeing established prices fall, then it's harder to make new housing stack up, because again, buyers will look at it and go, “Well, established homes are getting cheaper. I'm going to choose that rather than a more expensive new home.” But then you're actually really sowing the seeds for the next property price escalation, because we've already got an undersupply of housing. You exacerbate that undersupply because you're not delivering enough new housing, and then once interest rates start to come down, I would think that we start to see some really strong growth in prices again. More new construction becomes feasible, and that starts kicking off. But I think what you really touched on at the start there is the fact of the matter is that prices go up, construction prices go up. It's very rare that those construction prices go down. So if people are thinking that prices are going to go back in new housing construction to where they were at the start of the pandemic, that's just not going to happen.

Brent: Yeah. It's interesting you touched on prices going down. I'm hearing at the moment Perth's still chugging along at double-digit growth. So is Brisbane. You turn up at an auction and you're just swamped with bidders there. Melbourne, Sydney, not as much so, and a lot of people talk about it being a two-speed property market. I'm almost seeing that there's a four-speed market at the moment — and hear me out on this. I had a look at some data this morning. Perth prices, over the last five years, have increased 100%. So Perth prices have doubled. Brisbane and Adelaide have gone up over 80% in that same five-year time frame. Sydney has increased just over 40%, and in five years Melbourne prices have gone up 12%. So I'm looking at this dynamic that there's all these counter-cyclic markets occurring within markets, which we'll talk to at a later stage in our discussion about the individual states. But to me it's a really difficult market to read, and there's a lot of blanket statements: the Strait of Hormuz is closed, federal budget announcements, prices all going back by 10%. I think we've really got to cut through and see state by state how that works. Just interested to get your views.

Cameron: Yeah, I mean, you can't sort of make a blanket statement. People like to monitor the market at a macro level. You look at someone like the Reserve Bank; they look at what's happening nationally, because they've got a very macro focus. But even within a city, what's happening in one part of a city could be very different to what's happening in a different part of the city, and I think that's what we're seeing at the moment. I know it probably pains you as a Melburnian to say that prices are only up 12%.

Brent: I'm in Sydney half my time now, Cam, so I've got a balance for you. But you're a Brisbane guy moving to Melbourne, so you must see that that's an affordable place to live in.

Cameron: Well, you're definitely seeing differences in affordability. Like the Perth example — remember, Perth property prices didn't do anything for about 15 years, and they've taken off over the last five years. Brisbane has obviously, and not just Brisbane, broader southeast Queensland prices have gone absolutely through the roof, and a lot of that's been because a lot of people that would have left Queensland have had the flexibility to stay. I mean, I lived in Queensland through COVID. It was pretty light on for any lockdown or anything like that. We had it pretty easy compared to Victorians.

Brent: I'm still shaking here, Cam, so don't bring the word lockdown into a conversation. But we will touch on those individual states and the nuances further into our discussion. We spoke about the time frame, and when people ask me where's the market going, I say, well, let's just take a step back. And if you wouldn't mind answering this for us: if you look over history, and if we track back 30 years, property prices throughout — whether it's the Y2K bug, or the dot-com boom, or the GFC, and COVID, and now the effects of the geopolitical issues in the Middle East — evidently we've seen that it has gradually gone up over time. I just wanted for you to unpack whether that's a myth or a fact.

Cameron: No, I mean, we're in an environment where we target inflation of two and a half percent, and that's inflation of the cost of all goods. So when you're in an environment where you're targeting prices to rise over time, property prices are also going to rise over time, and we're definitely seeing that. I think the challenge for people is that property prices have tended to rise a lot more than inflation over that time, so it's definitely got more expensive to purchase a home here in Australia. What I would say, though, is I think we've seen more volatility over the last decade, and more periods where property prices are falling, than we had probably over the previous 20 or 30 years. So it looks like we're going into a more volatile period. If that's the case, it's not going to be just one-way property price growth consistently over that period of time. There will be periods where property prices fall, but generally over time I would fully expect that the cost of housing is going to continue to get more and more expensive.

Brent: Yeah, well, I'm with you on that, unless this historical data is going to be changed — which I'm happy to be proven wrong — but I'm a full believer that the market will continue to push on. It was interesting again, I was just reflecting back on something I read the other day getting off the plane: that the median price of property in 2000 was $290,000, and it's a touch over $1m now. At the same time, in 2000 the average salary was $42,000. That's what you make a week.

Cameron: I wish.

Brent: Now it's $90,000 basically. And where I'm going with this is that salaries have gone up 114% over that 26-year period, however property prices have increased 261%. It's no wonder that we're saying first home buyers have got it tough.

Cameron: Oh, undoubtedly. And the hardest part for a first home buyer is how long it takes to save. But while you're saving to get a big enough deposit to enter the market, the market's increasingly getting away from you more and more. And look, the federal government's obviously announced their home guarantee scheme, which allows people to enter the market with a 5% deposit, and they don't have to pay lenders' mortgage insurance, which is an additional cost when you buy a property. It's not a bad antidote — the deposit hurdle is the biggest challenge — but ultimately, what we need to be delivering is more housing supply. The way you curtail that price growth is to have more homes available for sale, developers building a lot more housing.

Brent: Who's responsible for this? When you talk about the supply side of things, there was a time when there was the first home buyer boost, and it was really driving that demand side, or assisting buyers with deposits. But I just keep hearing over and over again that it's the supply side, and it just feels like the federal government are handballing it to the state government, then it goes to local council, and it just feels like it's going around in circles. The government can't bail out everything itself, and it's reliant on the private sector to assist in this housing supply issue — companies like Frasers that are willing to build apartments and homes and affordable accommodation for people to move into. Who's responsible for it all?

Cameron: Well, the problem is no one's got overall responsibility.

Brent: You and I can sort this out today. We'll get to the bottom of it.

Cameron: Yeah. At a federal level, you've got certain policies, and I know we're going to talk about the budget later and what's happened there. But the feds basically control how many people come into the country, and whilst we say it's a supply issue, we've also got way too much demand for housing, both on the rental side of things and people wanting to buy.

Brent: Okay, pause there, because I just heard that again. Our immigration numbers are through the roof, so we've got all this demand coming in from overseas with migration. Do we need to cut migration to 100,000 immigrants to stop the amount of people coming and renting property or buying property? Is that an element that needs to be considered?

Cameron: I don't know what the number is we need to cut to, but I think we actually need to have a policy of what rate of population growth or overseas migration we want to have, and how that fits with our ability to build houses. But not just —

Brent: They're forecasting about 200,000 this year. Last year's forecast was the same, and it was nearly 400,000. So we're missing those targets.

Cameron: We're definitely missing those targets, and it's not just about housing. I recently wrote something about how we've basically added the population of Canberra in the last 12 months to Australia's population.

Brent: Hopefully not all politicians.

Cameron: No. But we haven't added a Canberra worth of infrastructure, schools, hospitals, roads — and certainly not a Canberra worth of houses. So someone needs to actually take… I think our government needs to have a population plan. At the federal level, they're responsible for how many people come into the country, and there's certain policies like the home guarantee scheme that they can implement. Then you've got at the state level land use planning and things like this, and certain other responsibilities. But ultimately, it's the local governments that are the ones approving or not approving new housing. We've got, what, 27 million people, and we've got three layers of government. And I think particularly at the state level, the state government doesn't want to step on the toes of the local governments, doesn't want to get them offside. So they maybe aren't making the decisions that they should do to enable local governments to deliver more housing. But there's also, I think, just this assumption that you just let development happen. Yes, developers get charged for infrastructure and all that sort of amenity, but the local governments still have to fund that, and them actually being able to fund that amenity — for a lot of them — and raise the capital to do that is a real challenge as well. So it's almost like you need the feds or the state, who have got a bigger budget, to come in and help the local governments to deliver the infrastructure and the amenity that's needed to support new housing. But I think no one wants to really step on anyone else's toes or tell anyone else what they should be doing.

Brent: My takeout there is, Cam, we need to fix the supply side. We need to fix the demand side as well, with migration, and potentially look at bipartisan policy that's going to assist us cut through some of that red tape from federal, state and local government. We're talking about first home buyers, and a really scary statistic that I was reading again the other day: the average age of a first home buyer in 1975 was 24 years of age. Today, it's 41 years of age. It's incredible how that has changed. So when you see these numbers, what does this change tell you about the market and people being locked out of the market?

Cameron: Well, I think it talks to how expensive housing has become, but I think it also talks about how we live our lives. So in the 1970s most people didn't go to university. I wasn't around then, but it's a generalisation that a lot of people met their future wife or husband either at school or when they were fairly young. I know my parents got married — I think my mum was 20 and my dad was 22. I didn't even meet my wife till I was 30. So if you're staying at university longer, you're studying longer, and a lot of younger people go and travel overseas and do things that maybe older Australians didn't do when they were young, you're going to get to the point where you're forming your family at an older age, and you're probably not looking to settle down and have roots somewhere until you're older as well. That's part of it, but certainly the cost of housing is also a big part of it as well. You're simply saving for years and years and years to get a big enough deposit to enter the market.

Brent: You're almost needing a partner to go halves in buying a house. Well, it might be hard having a family, but halves in buying a house. It just shows how difficult it has become in the property market. There's this old analogy that I think my dad might have told me many, many years ago, that it's not the timing of the market, but time in the market. I just wanted you to unpack: what does that phrase mean to you, and is it still relevant today?

Cameron: Yeah, I think the phrase means that if you're buying a property, whether that's an owner-occupied home or an investment property, it's not about trying to make a quick buck. It's about buying a really good asset that's going to appreciate in value over time, and holding that asset for a long period of time. I've made the mistake — and I'm about to do it again — of moving on a too regular basis. Every time you buy a property, you're paying stamp duty, you're paying agent commissions.

Brent: Nothing wrong with paying agents commissions. I'm all for being an estate agent.

Cameron: But I guess the overall point is you get into the market and you hold. The ideal situation is to hold for a long period of time. There's going to be fluctuations in the market. Even people that study markets constantly can't pick the bottom or the top of the market. They're not bailing out of the market at the right time or getting in at the right time. But it's buying and holding and staying in a market and seeing that appreciation in price over a long period of time.

Brent: Yeah, and I reflect back too on the statistics that I gave you at the start about Perth prices doubling in five years during COVID. So if you had told somebody during COVID… a lot of people would have thought maybe it's not a great time to be buying, but they would have done extremely well out of it. Price growth has been modest at best in Melbourne over that five-year period — call it 12% — however, the next five years might bring a little bit more growth, because it is counter-cyclic to those other markets. So evidently, they'll all have their day in the sun.

Cameron: Yeah, and there's big drivers. Obviously at the moment Melbourne looks really affordable compared to particularly Sydney, but also other capital cities. Rental returns are better, so you get more investors in — although we'll talk about that a bit later with the budget, maybe not so much. But every market does tend to have its time in the sun, and the last five years it's been all about those sort of secondary, larger capital cities that have had a really strong increase in price. Sydney is a bit different because it's a highly desirable international city, but obviously it's very expensive. And Melbourne, I think, is just suffering a hangover from what we saw during the pandemic, and we're not seeing as many people moving to Victoria as we did pre-pandemic.

Brent: Yeah, which I think is a great segue into our next segment, Cam. I think you've really summarised where we are at within the market very well. My key takeouts are that property is a long-term play, and evidently history tells us it increases in value over time. Whether it's 10 or 12 years, it'll double in value over that time — well, that's what we've seen. They do have counter-cyclic markets, which is what we'll talk about in a moment. And we need to look at supply and demand sides as far as getting it on the right course. So thanks for summarising the national market for us.

Great segue to talk about your hometown in Queensland, and let's really unpack what that market is doing at the moment. Because what we have seen is significant growth over the last five years, 80-odd percent growth, which has been significant. It just feels like it's a runaway train, and it's going to continue going. Can you give us a bit of an insight, as a local, as to how the southeast Queensland market's performing, and potentially where you see it going over the next five years?

Cameron: Yeah, look, southeast Queensland, as you said, has had just an absolute gem of a run over the last five years. I think when the pandemic hit, we saw that a lot of people wanted to get out of New South Wales and Victoria in particular. We saw a huge movement of people across the border up there.

Brent: Yeah, that net interstate migration was off the charts.

Cameron: It was. And remember, during that period, net interstate migration isn't just about people coming; it's about people leaving. Fewer people were leaving the state as well, because they went, “Well, I can work remotely. I'm probably not going to go to Victoria to go and be in lockdown for a couple of years.” And similarly, Sydney had quite strict conditions during the pandemic as well. And then yes, people have had to come back to the office on a more regular basis than they did during the pandemic, but it's pretty easy in southeast Queensland, if you have a head office in Sydney or Melbourne, to maybe jump on a plane and go down for two days a week and then work locally for the rest of the week. In terms of that market, the biggest challenge in southeast Queensland is there's a lot of people that want to live there and there's very limited supply of stock, and this is both in the established market but also in the new housing market as well. We're seeing a lot of really high-end apartments in places like the Gold Coast and inner-city Brisbane and things like that, but realistically, that's out of reach for most of the buyers. We're not seeing a lot of new land coming to the market. There's places like Ripley, and there's a lot going on around Caboolture in that area in southeast Queensland now, but there basically hasn't been a new land release on the Gold Coast for a couple of years now. There's a big project on the southern end of the Sunshine Coast, and selling really well —

Brent: Just red tape. It feels again very difficult to unlock greenfield sites and get land to market, but equally, again, getting the apartment buildings up given construction costs and limited builder pools that are in market there, to get these off the ground. So there's again a huge amount of population growth, what you're telling me, and really limited supply.

Cameron: Yeah, and the builder thing is a real challenge, because there's not many. You don't have as many big builders operating in southeast Queensland as you do in a market like Victoria or New South Wales. It's pretty much Hutchies and a few other people, and that's about it. And there's only so many projects that these builders can do at one time. So you're just not getting the supply. What you are getting in the apartment market is high-end supply; you're not getting that lower price.

Brent: So getting north of $22,000 a square metre or something like that. So the revenues are there to make the construction stack up. But that's again a limited market, I would have thought.

Cameron: Yeah, 100%. You've got a finite number of people that can buy that, whereas there's a lot more demand at that lower price point, but it's just not stacking up feasibility-wise. And then in terms of the land side of things, yeah, there's a lot of red tape. Again, I think it's a case of the state government not wanting to stand on the toes of local governments. There is a review of the Southeast Queensland Regional Plan set to go late this year and early next year — hopefully more land gets put into the urban footprint, because that's what's desperately needed, particularly in places like the Sunshine Coast and the Gold Coast, where there's a massive shortage of land.

Brent: Crystal ball number for you: growth over the next five years. What sort of number would you put on it as a percentage?

Cameron: I don't think it's going to [and I'm holding you to it] — I don't think it's going to do the 85% that we've seen over the last five years, but I could easily see sort of 35–40% growth over the next. The biggest challenge for southeast Queensland, though, is going to be affordability. Obviously, it's a lot more expensive than Melbourne now. It's still cheaper than Sydney, but that gap is closing pretty rapidly.

Brent: Yeah, it sounds like there's still a really strong story for Queenslanders and property prices there. Thanks for unpacking that part of the market for us.

We might move further down south into where we're sitting today, New South Wales. If you could give us a guide — as I mentioned before, the last five years, 42% growth. It's probably been pretty consistent with median price growth over a long period of time, but it's just staggering, the house prices, when I look at median house prices being $1.5m now. Particularly when I compare it back to Melbourne median house prices, it's a 58% differential between the two, and the gap there keeps getting wider. I just don't seem to work out how people can afford that.

Cameron: Yeah, and I think it just talks to how much wealth there actually is in Sydney. But again, it's not just about the gap in the median price; it's what the median house in Sydney looks like compared to the median house in Melbourne. The $1.6m median house in Sydney, you're still probably 35–40km away from the city, whereas in Melbourne you're probably only 15–20km, or if you go west you're probably only five or 10km from the city. So that's the big thing for me. Affordability is the biggest challenge in New South Wales, and I think the fact that younger people are leaving New South Wales is a big problem for the state. And then you go and look at new housing — and obviously Frasers delivers new houses — and the high cost of new housing, even a long way away from the city, is a real challenge. So I think that's why you really need to focus on placemaking when you're delivering new housing into the New South Wales market. But look, I still think that it's going to see prices rise over the coming years. I wouldn't be surprised if it's similar, maybe a little bit less growth than we've seen over the last five years, but a lot of this is going to be determined by what happens with interest rates as well. If we see higher interest rates for longer, we'll probably see a period of prices falling for a longer period.

Brent: We're going to finish on that million dollar question at the back end of this chat about interest rates. But just on New South Wales, the big infrastructure story here with the new airport out at Badgerys Creek, the metro line that's gone in, the growth through Western Sydney — how's that translating into property prices and opportunity for consumers?

Cameron: Massive opportunity, I think. It started kind of with Parramatta, that you don't necessarily have to commute into the city — you can get a job out in Parramatta — and obviously now that's moving towards Badgerys Creek. And I think it's October or November this year that it's actually going to open, so it's there and it's happening, and the federal government and the state government have poured a huge amount of money into that Bradfield city out there. There's going to be heaps of jobs. Obviously, airports themselves create a lot of jobs as well, and I think people that are working there are going to want to be located close by. So we're seeing really strong conditions in Western Sydney. But again, a lot of the challenge in Western Sydney for developers is finding big enough sites. A lot of the new projects there are smaller, piecemeal sites. So if you actually want to do a big masterplanned community —

Brent: Something on scale is hard to do, as you said. It's trying to unlock that patchwork quilt of individual sites, and trying to combine a lot of those smaller parcels to make a larger site, scalable and work for a developer, is challenging.

Cameron: Yeah, and I think that whole area is really being transformed. I look at data a lot; I don't actually get out to these places a lot. But I did travel out to Western Sydney last year, and it was quite different to what I actually expected it to be. You have these expectations, and you hear all the stories, but what's actually going on there — it's actually happening. You can see it on the ground. It's very impressive what's being delivered.

Brent: Absolutely. And driving — it was about six months ago — driving around that airport, it is a generational change and shift that we're seeing out there, and I think to get in early, property investors and property owners are going to do very well in that western pocket. So there is really good opportunity if you dig around and unpack what's actually happening in the market there. Again, I just wanted to reflect back on the gap between Melbourne and Sydney. Do you see that increasing or retracting over the next five years?

Cameron: I think it'll reduce over the next five years. Well, I'm sure we'll talk about Melbourne in a minute. Melbourne is certainly a very depressed market at the moment. But the projections are it's going to be the most populous city in the country within the next sort of five to 10 years. It's got a lot going for it. I don't feel like the gap between Sydney and Melbourne prices should be as wide as it is currently.

Brent: Yeah, interesting. And again, thanks for unpacking that Sydney market. There's so many nuances to it, but I think what you're saying is over the next five years there's going to be some modest growth there. There might be stronger growth in areas like the western part of Sydney, where there's some strong infrastructure. So thanks for taking us through that.

We'll move on to the Victorian market, my homeland, hometown of Melbourne. So a little bit biased about Melbourne, but also a little bit embarrassed about where we're at at the moment. It's significantly underperformed since COVID, over the last six years. It is now the sixth most affordable capital city in Australia. Yet in the next five years, I believe it's going to be the most populated capital city within Australia. What has driven the lack of performance in that property market for five years?

Cameron: Ah, where do we start? There's been quite a few things. First, there was COVID, and obviously we had COVID everywhere, but it was much more severe in Victoria. 200 days of lockdown over two years, I think it was, or it was more than 200 days [I didn't have enough fingers to count]. And the state has then gone into significant debt because of that lockdown. They've increased taxes on property investors, which has made investing in Victoria much less attractive. Obviously, a lot of people fled Victoria during the pandemic as well, but equally, a lot of younger people from the rest of the country that before the pandemic used to flood into Victoria didn't do that, because they didn't want to go into lockdown for that period of time. And then, if we come out of the pandemic, there's just been — again, because of those increased taxes on investors — quite a lot of stock on the market. So people that are looking to buy in Victoria… there's been fewer people looking to buy, because you haven't had as much investor interest and you haven't had as many people moving there. Prices have just been really quite depressed. Now, I guess it depends on your perspective. If you're trying to buy, that's great news, because housing's relatively more affordable. If you're renting, it gives you a reason to jump out of renting and buy a property. But you certainly, if you own a property and are expecting price growth, you've been very disappointed over the last five or six years in Melbourne.

Brent: Disappointed — and disappointment's an understatement, I think, from my part and for those consumers, or those people that actually hold property in Melbourne. But again, I think you touched on those key points. One is the COVID effect; it feels like the hangover has continued to happen. The taxes — every time you pick up the papers, it's tax, tax and more tax. $200 billion in debt, so Victoria's got more than all other states and territories combined. I'm not painting a good picture here, so there's some underlying issues there. However, I'll just go back to that affordability and go, it's now the sixth most affordable capital city. We've talked about your forecast over the next five years on the other cities. What's your forecast for Melbourne's price growth over the next five years?

Cameron: Look, I'm pretty bullish on Melbourne. The only thing about Melbourne I would say is we actually need that excess stock that's on the market, someone to actually buy it and to be absorbed. So I don't think the next couple of years are necessarily going to be strong for Melbourne. But if we're looking in a five-year time frame, I think that sort of three, four and five years in Melbourne is going to be quite strong, because I think life will start to get back to normal. People will start moving there again —

Brent: There's that song, “Hold On, Help Is on Its Way.” That's it for Melburnians. Those that own property in Melbourne, hold on. You're going to have your day in the sun.

Cameron: I wouldn't be surprised if in those last three years of that five-year period you're seeing double-digit price growth, if not well above that rate of double-digit price growth as well.

Brent: And that is music to my ears. So now you're saying double-digit price growth for Melbourne in a couple of years to come. May not be in the next one or two years, but in a couple of years Cameron's predicting double-digit price growth for Melbourne properties. So that's music to everyone's ears that own property in Melbourne. Thanks for wrapping up the Melbourne market. It's a really interesting dynamic there, and a lot happening, whether it's supply, demand, tax, some of the tax reform there, but also some legacy issues with COVID. And let's hope that the predictions of Cameron Kusher come true for those homeowners.

Cameron: Make sure you read my disclaimers.

Brent: So thank you for that. Well, I'd now like to try and wrap things up for our listeners, because we have a range of listeners out there, whether it's first home buyers, upgraders, or those just sitting on the fence, curious as to what's happening in the market — and that's probably the biggest cohort I'm seeing at the moment. We have a lot of inquiry coming in on all of our product, and it's elevated inquiry that we've never seen for the last six months. It's been highly elevated, even through all the disruptions we're having. Consumers are sitting on the fence and going, “What is actually happening within the market here?” Probably the biggest contributor to people not moving forward is interest rates. We've had three interest rate increases in the last three or four months, and I think rightfully customers are worried about how far will interest rates go up, can I afford the repayments, and my borrowing capacity seems to be reducing. Just wanting to get your views on interest rates.

Cameron: Yeah, as I said at the start, I think interest rates are back at levels we haven't seen since 2011. And there's a lot of people that have bought a home or become adults during this period, and maybe rented, that have only ever seen interest rates falling, and generally that's led to property prices rising. We're now in a much higher interest rate environment. I think there's the possibility we get at least one more interest rate increase this year.

Brent: So your prediction is one more interest rate — what, 25 basis points?

Cameron: 25 basis point interest rate increase, and that's because inflation is just still too elevated. And the problem we've got in Australia is we didn't get inflation under control like other countries did. We didn't take interest rates as high, and that didn't lead to inflation coming down as quickly. And as a result of that, the three interest rate hikes we've had this year are fully justified, based on how high inflation was going into what's happening in the Middle East.

Brent: So you're saying we deserved it. We had this coming to us.

Cameron: I wouldn't say it in those terms — they're your words. But I think if you look at other countries around the world, their central banks have met since we've had all this malarkey in the Middle East, and they're in a position where they can look through that and go, “Okay, we don't have to lift interest rates now. We can wait and see how this progresses.” But we weren't in that situation. I think the biggest thing, though, is I think it's unlikely that we see interest rates coming down for some time as well. So whilst they may not keep moving up, they're going to be at this elevated level, I believe, for a period of time as well. And I think once we get some stability in interest rates, that's when confidence will come back into the market, because people will just go, “Okay, this is the situation, I can deal with it.” But it's the uncertainty, and that expectation that you're going to continue to see rates increase — I think that's what stops people from actually making a decision.

Brent: Yeah, it's really spooked the market with, I think, so many compounding issues, whether it's the three interest rate increases, the geopolitical issues, or the inflation, that is really causing people to freeze and not make any decisions. I think you're right, I think we'll get another interest rate increase. And it's once we have stability in that market that I think we'll start to see transactions coming through more freely. But really, what I've been listening to in your insight — and you're basing all of this on fact — is that over long periods of time, property prices increase in Australia. Whether it's world wars, whether it's geopolitical issues, whether it's pandemics, we are seeing property prices being quite predictable at times, in that they tend to increase and tend to double every, might be, seven to 12 years, depending on what time you are in that market. So it's reassuring, I think, to our listeners out there that if they're in it for a long-term play, they're going to get something back at the end. Evidently, what I'm hearing more and more is that yes, it's a good investment, but people need a home to live in. People need shelter. And people want security of their own home, and not to be at the beck and call of their landlord. So I think there is some critical thinking there, that if people can dig into the data that you've given us, it gives us reassurance that property prices will continue to go up. Yes, there's maybe going to be a couple of bumps with interest rates. However, we've seen that over that 30-year picture, in the 90s, of 14–15% that my parents were talking about with interest rates and how hard they had it. I think they bought a house for $3,000 or whatever it was back in the day. So throughout all that, property prices have increased; throughout elevated interest rates, property prices have had a pretty consistent journey along the way, which gives me a bit of confidence, and hopefully our listeners a bit of confidence as well. Given what we've covered, what does the market outlook mean to you, and look, for you over the short term, in the next 12 months? So if you're to say, generally, how do you see the market trading out over the next 12 months into early 2027?

Cameron: Yeah, look, I think there's really two markets here. So there's the established market, and I think we'll see some weaker conditions in that established market. In terms of the new homes market, there's probably going to be price pressure on because of construction costs going up. But I think once we get that interest rate stability, then people will get a level of comfort to go and make a decision again. And we probably start to get that stability by the back end of this year. So I think things will certainly pick up the second half to the final quarter of this year. We'll start to see a bit of an improvement in the market.

Brent: I won't sing “Hold On, Help Is on Its Way” again, but it just feels like we'll just wait it out over the next six months, and we should really start to see some momentum, hopefully in sales velocity and pricing, over the next 12 months. Cam, it's been so good talking to you. I've always learned so much from our conversations. Just one bit of advice for you, mate: get a good football team when you move to Melbourne in the coming months. Red and blue would look good on you, so maybe Melbourne Demons is the one to support.

Cameron: We'll see about that.

Brent: Anyway, thanks for joining, Cam. Really appreciate it.

Cameron: Thank you.

Brent: Thanks for listening to the Live proud podcast, brought to you by Frasers Property Australia, creating stronger, smarter, happier neighbourhoods since 1924. Because pride starts with where you call home, but it grows through community spirit and a sense of belonging that makes life richer every day. Subscribe to hear more conversations that celebrate what it means to live proud.

Mini episode

Queensland Market Outlook with Cameron Kusher

Brent: Welcome to the Live proud podcast. I'm Brent Hill. Today I’m talking with property strategist Cameron Kusher for a close look at the Queensland market — what's driving it, what the Olympics mean for prices, and what buyers should know right now.

Great segue into our next segment, Cam. I think you've really summarised where we are at within the market very well. My key takeouts are that property is a long-term play, and evidently history tells us it increases in value over time. Whether it's 10 or 12 years, it'll double in value over that time — well, that's what we've seen. They do have counter-cyclic markets, which is what we'll talk about in a moment. And we need to look at supply and demand sides as far as getting it on the right course. So thanks for summarising the national market for us.