Picture a new build under contract with settlement about 18 months away. Since you signed, values in the suburb have dipped, and you are wondering whether tenants will still be there when the keys are handed over. The answer depends on the city, and the data is moving.
What the numbers say right now
Values are the easier part to describe. Cotality's national Home Value Index fell 1.2% in October, the seventh consecutive monthly decline, and the index is now 6.7 percent below its March peak.
Rents are the part that matters for tenants. Cotality's national vacancy rate increased from 1.7% in the March and June quarters to 2.1% in September, its highest level since January 2025, although it remains well below the pre-COVID decade average of 3.3%. That is still below average, so tenants have a narrower choice than they would in a balanced market, but the gap is closing.
SQM Research measures the same thing differently and reports a lower figure. Australia's national residential vacancy rate increased to 1.4% in September 2026, up from 1.3% in August. SQM and Cotality use different methods, so their numbers should not be compared directly.
The picture is uneven. SQM's commentary suggests a gradual easing in rental conditions, led by Sydney and Melbourne, where available rental stock has increased over the past year. Adelaide is still the tightest market in Cotality's data, and Hobart's vacancy rate has more than doubled to 3.1%, up from 1.3% a year earlier. Rent growth is slowing too, with annual rent growth at 5.5%, slowing from the peak earlier this year.
When this suits an investor and when it doesn't
Falling values and easing vacancy point to a market where buyers have more choice. Cotality's research director has described buyers as noticeably absent, reflecting low confidence and ongoing serviceability barriers. Borrowing capacity is the other part of the story. The RBA has already lifted the cash rate by 100 basis points this year to 4.60 percent. At the time of writing, the market was also pricing in another rise.
A plan of this kind tends to suit an investor who has a clear cash flow picture, a longer hold, and reserves for vacancy and repairs. It is less suited to a plan that needs rent to cover every cost from day one with no buffer, or one that might force a sale in a falling market. The costs to weigh include vacancy, loan repayments, strata, management fees, insurance and land tax.
The rent figure is an assumption to test, not a promise. Vacancy and values both move, and the cash flow has to hold up when they do.
A worked example
The numbers below are illustrative only. They are not an estimate for any property.
Assume a new build at a purchase price of $650,000 and a weekly rent assumption of $480. That gives gross rent of $24,960 a year, about 3.8% of the price. Cotality's national gross rental yield is 3.85%, the highest since August 2019, so the example sits close to the national average before any costs.
Two weeks of vacancy in a year removes $960 of gross rent. If the property's value fell by 6.7%, that would be about $43,550 on paper. Neither figure is a forecast. Both show why an independent rental appraisal and a clear cash flow buffer matter.
For SMSF buyers, the rules have changed. New SMSF residential property LRBAs end on 10 August 2026. SMSFs can still buy residential property outright with fund cash, as the ban only applies to borrowing. Borrowing through a unit trust is a separate structure. Whether that trust is related to the fund must be confirmed by an SMSF specialist. A related trust that borrows can push the fund's units into in-house assets. An SMSF can only hold in-house assets up to 5% of the fund's total assets at market value. On a fund with $800,000 in total assets, that is a cap of $40,000.
What to do next
- Get an independent rental appraisal for the specific address, and check the vacancy data for that area and property type.
- Speak with a broker. For SMSF structures, choose one who specialises in SMSF lending. EWC refers every loan to its broker network and takes no commission on any loan.
- Ask the right professional about structure and tax. An SMSF specialist accountant or solicitor can advise on whether a unit trust structure is appropriate for your fund. A licensed financial adviser can look at how a property fits your broader position.
If you want to talk through the cash flow side of a new build, you can book a free call. For more background, see the Elite Wealth Creators insights section.
General information only, not personal financial advice. Speak with a licensed adviser before acting.