It’s happening.
After two RBA rate cuts in early 2025 — with another two or three forecast before year’s end — a quiet but powerful shift is taking place among investors. Not in headlines. Not in hype. But in spreadsheets.
Because when you actually run the numbers, what used to be too expensive to hold… is now edging back into the green zone.
This isn’t a story about trying to time the market. It’s about recognising that the financial dynamics have changed — and with them, the opportunity to re-enter the property game is looking very real.
It used to cost $18K a year to hold a property. Now? Try $9K.
Let’s rewind to mid-2024. Imagine you were looking at a $600,000 investment property with a 4.5% rental yield. At the time, many investor loans were sitting around the 6.5% interest-only mark. The outcome?
You’d earn around $27,000 in rent, but pay $39,000 in interest — leaving you $12,000 in the red annually, before even factoring in maintenance, insurance, or tax.
Fast-forward to now. Fixed interest-only loans are available as low as 5.45% for certain investors — Macquarie right now being one standout example. That shift in rates changes everything. Now your interest cost on that same $600,000 loan drops to $32,700, while your rental income remains unchanged at $27,000. Your net cost is suddenly around $5,700. Add in depreciation and tax benefits, and your after-tax holding cost could land closer to $4,000.
For many, this is the tipping point. It no longer feels like financial punishment to own an investment property. In fact, it starts to make real sense again.
Growth still matters — but now the holding cost is tolerable
Of course, smart investors aren’t just looking at cash flow. Capital growth still matters. But when the cost of holding a property is manageable — say $5K–$6K a year — even modest growth tips the balance in your favour.
If that same $600,000 property increases by just 3% annually, you’re gaining $18,000 in value while spending $4,000–$6,000 to hold it. That’s a net benefit of $12,000–$14,000 — without factoring in rent increases, tax offsets, or compounding value over time. It’s a simple equation: if you can comfortably hold it, and it grows, the logic stacks up fast.
So what are investors buying?
This is where strategy matters. Investors getting back into the market aren’t buying anything and everything. They’re targeting specific types of stock — properties with broad appeal, decent fundamentals, and a high likelihood of long-term performance.
One clear pattern? Owner-occupier-style properties are in demand. These include small detached homes, duplexes, townhouses, and 3–4 bedroom homes in family-friendly suburbs. They attract both renters and buyers, which supports both yield and capital growth.
There’s also a renewed focus on buying within 10–15% of a suburb’s median house price. It’s about staying close to where the bulk of sales happen. If most properties in an area sell for $750,000, buying at $700,000–$770,000 keeps you in the mainstream. Stray too far above or below, and you risk buying in the margins — where capital growth can be patchier.
Another key trend? Investors are favouring new or near-new builds. This isn’t just about street appeal — it’s about depreciation, lower maintenance, and better compliance with increasingly strict tenancy and energy-efficiency regulations. In areas like the ACT, newer homes with higher energy efficiency ratings (EERs) are quickly becoming the preference for renters, and may soon be a necessity under changing laws.
What about positive gearing?
It’s rare in metro areas right now — at least if you’re aiming for growth as well. But in parts of regional WA, NT, and some corners of QLD, gross rental yields of 6–8% are still achievable. For example, a unit in regional WA might be priced around $360,000 and return $580 per week — delivering an 8.5% gross yield. In Darwin, some units are yielding over 7.5%.
That said, these properties don’t always deliver strong long-term capital growth. For most investors, the sweet spot is a mildly negatively geared property in a growth corridor — with holding costs that are now back to being manageable.
What if rates fall further?
Some fixed rates already reflect this possibility. With economists forecasting another two or three RBA cuts in 2025, most major lenders are pricing their 2- and 3-year fixed investment loans at around 5.39%–5.59% — roughly where the market expects the variable rate to land later this year.
In other words, if you lock in a sharp fixed rate now, you could get “the future” early — and with greater certainty. And that’s part of the appeal. Fixed rates offer stability at a time when yields are still playing catch-up and sentiment is just starting to recover.
So is it time to get back in?
Twelve months ago, the numbers made investors wince. Now they’re worth a second look.
Rents are rising. Competition is still soft. Fixed rates are back to sensible levels. And for those who sit down and do the math, the outcome is clear: the equation has changed. Property investing, once paused, is quietly reactivating.
Ready to run the numbers properly?
If investing felt too hard, too risky, or just not worth it before — now is your chance to revisit it with the facts on your side. The numbers have shifted, and the smart money is already moving.
Book a Free 30-Minute Finance Strategy Session. You’ll walk away knowing:
- What types of properties are performing best in this new market cycle
- How to structure your lending for flexibility, tax advantages, and future-proofing
- Whether refinancing or investing makes sense for your specific goals right now
This isn’t about guessing. It’s about clarity — so you can act while this window is still open.
This no-obligation free session is held with one of our experienced mortgage brokers. It’s not a sales pitch—just real, strategic advice tailored to your situation, so you can make smarter financial decisions.
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Trilogy Funding Two is a corporate credit representative (Representative Number 506131) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit Licence 391237)
About the Author
Since 2008, David Thomas has built a business aimed at servicing the needs of property investors, owner occupiers and small business owners. David is recognised as one of the top 10 independent mortgage brokerages in the country, David and his team have settled almost billions of dollars worth of residential and investment loans over the last decade.
Known for his straightforward, relatable style, David believes by educating people about property funding; they fare better in the market. By sharing his expertise openly, some of the people he educates will likely become his clients. It's a win-win approach.
David Thomas is a credit representative (Representative Number 506153) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit Licence 391237).