Authored by Robert Grajczyk (Investment Director)
Australia’s property market is entering a new phase, driven by easing interest rates, resilient employment, and renewed infrastructure investment. Yet, many challenges remain, including construction sector volatility, supply constraints, and policy gaps that continue to shape the landscape.
Tailwinds Supporting Property Demand
The Reserve Bank of Australia has initiated a rate-cutting cycle, reducing the cash rate to 3.60% as of mid-2025. While global uncertainties persist, further easing is expected. Lower rates improve borrowing capacity and support buyer sentiment—though traditional lenders continue to present slow turnaround times and restrictive criteria.
Population growth remains a structural driver of housing demand. Net overseas migration exceeded 500,000 in 2022–23 and remains elevated. While migration is set to moderate by 2026, cumulative growth will continue to underpin demand for both owner-occupied and investment properties.
Employment remains resilient, with unemployment at 4.2% in July 2025 and wage growth outpacing inflation. This supports household confidence and housing stability, even as the labour market shows signs of gradual softening.
Infrastructure investment is another catalyst. Federal and state governments are currently committing ~$100 billion annually to productivity-enhancing projects. Developments such as Sydney’s Metro West, Western Sydney Airport, Melbourne’s Suburban Rail Loop, and Brisbane’s Olympic infrastructure are reshaping urban corridors and unlocking new residential opportunities.
Policy Reform
Governments are taking steps to accelerate housing delivery. The NSW Government has introduced a $1 billion pre-sale finance guarantee, planning reforms, and announced fast-tracked complying development certificate approvals for the cost of $1. These initiatives are complemented by the federal expansion of the 5% deposit scheme to all first home buyers, regardless of income.
Current Challenges
While these reforms are promising, housing supply has so far remained constrained. Development approval delays, industry insolvencies, and labour shortages have contributed to a shortfall of approximately 55,000 dwellings since the introduction of the National Housing Accord in 2024. The $10 billion Housing Australia Future Fund has delivered only 370 homes to date, despite a pipeline of 18,600 contracted.
Despite strong demand and persistent supply shortfalls, many development feasibilities are simply not stacking up. Elevated construction costs and project delays have eroded margins, making it difficult for developers to achieve viable returns.
Why Fast, Flexible Capital Matters
In this dynamic environment, access to flexible capital is essential. At GCI, we understand that successful property projects almost always require speed, certainty, and a funding partner who can navigate complexity. Traditional funding channels often fall short, leaving room for credit solutions that can adapt to changing conditions. GCI support brokers to ensure their clients can access the right capital solution. Our approach supports developers and investors with tailored credit solutions that align with market cycles and the specific demands of each project.
In our last decade, we’ve remained committed to supporting borrowers through market cycles – by providing over $1.4 billion of funding, delivering responsiveness, flexibility, and certainty. Our funding has enabled borrowers to unlock opportunities that traditional lenders could not, including:
- $12 million land subdivision in Sydney’s northwest, supporting a borrower with limited financial strength
- $15 million industrial warehouse project in Sydney’s northwest, delivering funding within very tight timeframes
- $9 million large residential property in Sydney’s southwest, understanding future rezoning complexities to unlock value for the borrower.
At GCI, we provide bespoke funding structures to support real estate projects through to a desirable exit. Our team works closely with borrowers to understand their development plans and assess their situation, and while Australia’s property market has some tailwinds, a strong partnership between borrowers, their broker advisors and pragmatic funding partners can create win-win outcomes for all parties.
To learn more how GCI has supported property projects across Australia and how we can support you or your client’s next opportunity, speak to the GCI Real Estate team.