By Shaun Craike, Founder of The Buyers Co | October 2026
If you're thinking about buying an investment property in 2027, you've probably noticed that everyone has a different opinion about where the Australian property market is heading.
Some people believe property prices are about to fall further. Others are convinced we're heading towards another period of strong growth. Interest rates remain elevated, housing affordability is under pressure, and political uncertainty is adding another layer of complexity.
So, should you be buying property in 2027, or waiting for the market to improve?
I believe the uncertainty we're experiencing could create some excellent opportunities for property investors, particularly those looking to build a portfolio rather than purchase a single investment property.
But there's an important distinction between identifying an opportunity and being financially prepared to take advantage of it.
Over the past decade, my family and I have built a portfolio of 10 properties generating over $400,000 in gross annual revenue through a combination of traditional rentals, short-term accommodation and government-related tenancy arrangements.
The greatest benefit hasn't necessarily been the growth in property values or the rental income.
It's been the financial freedom that property investing has helped us create.
Today, I want to share how I would approach building a property portfolio in 2027, what I would look for in my first investment, and why the decisions you make with your first property can influence your ability to acquire the next five.
Why Invest in Property Instead of Shares or Other Assets?
There are plenty of ways to invest your money.
You can invest in shares, exchange-traded funds, bonds, businesses or a range of other assets. Many of these can be excellent investments, depending on your financial circumstances and objectives.
But one of the reasons I've personally focused on real estate is leverage.
Leverage allows investors to control a significantly larger asset using a relatively small amount of their own capital.
Consider a simple example.
You invest $50,000 in an asset worth $50,000. If that asset increases in value by 5%, you've made $2,500 before costs and taxes.
Now consider using that $50,000 as part of the deposit on a $500,000 investment property.
If that property increases in value by the same 5%, the property's value has increased by $25,000.
That's the attraction of leverage.
You're experiencing capital growth on the value of the entire property, rather than just the money you initially contributed.
Of course, the opposite is also true. A 5% decline in the value of that property would represent a $25,000 reduction in equity, before accounting for transaction costs.
Leverage magnifies both gains and losses, and that is why choosing the right property and maintaining manageable debt levels are so important.
Nevertheless, when used responsibly, leverage can be a powerful tool for building long-term wealth.
The Real Goal of Property Investing Is Financial Freedom
For me, investing in property has never simply been about owning as many properties as possible.
It's about creating financial independence.
Most Australians initially generate their income by exchanging time for money.
They work in a job, operate a business or provide a service.
And there's nothing wrong with that. In fact, your employment or business income is often what makes the first investment possible.
But there's a limit to how many hours you can work.
Investing allows you to begin building an asset base that has the potential to generate income and increase in value independently of the hours you personally work.
Imagine owning a $4 million property portfolio.
If that portfolio increased in value by 10%, it would represent $400,000 in additional property value in a single year.
That isn't $400,000 sitting in your bank account. It's unrealised equity, and the portfolio could just as easily experience a period of declining values.
You also need to account for the debt attached to those properties, interest expenses and ongoing holding costs.
But it illustrates why building a substantial asset base can become increasingly powerful over time.
The Power of Compounding Property Growth
Another advantage of long-term investing is the ability to benefit from compounding capital growth.
As property values increase, future percentage growth is calculated against the higher asset value.
For example, a property worth $500,000 that appreciates by 5% annually would theoretically be worth approximately $814,000 after 10 years.
That's around $314,000 in capital growth, without purchasing another property.
Under Australian tax rules, capital gains tax is generally triggered when an investment property is sold or another relevant CGT event occurs, rather than simply because its market value rises.
That can allow unrealised gains to compound while an investor continues holding the property.
The objective is to buy assets worth holding for the long term, rather than relying on continually selling and repurchasing properties to create wealth.
Why 2027 Could Be an Interesting Year for Property Investors
The Australian property market is entering 2027 with a combination of challenges and longer-term opportunities.
We have elevated borrowing costs, affordability pressures, uncertainty around inflation and ongoing difficulties delivering new housing supply.
That creates a difficult environment for some buyers.
But it also creates a situation worth examining closely.
1. Interest Rates Are Creating Pressure on Buyers
In September 2026, the Reserve Bank of Australia increased the official cash rate to 4.60%.
Higher interest rates directly influence borrowing costs, reduce borrowing capacity and increase the cost of holding investment properties.
For some investors, that makes purchasing financially unviable.
For others, it means they need to reconsider the type of property they purchase and place greater importance on rental income.
The Reserve Bank has also highlighted that inflation remains elevated and that further tightening could be necessary.
This means investors shouldn't assume interest rate cuts are guaranteed in 2027.
My personal view is that if inflation comes under control and borrowing costs eventually decline, we could see buyer confidence improve.
That could create stronger demand for property.
But I wouldn't build an investment strategy that only works if interest rates fall.
A good investment needs to be financially manageable under today's conditions, with any future interest rate reductions providing an additional benefit rather than being essential to its success.
Source: Reserve Bank of Australia, September 2026 Monetary Policy Decision.
2. Australia Still Has a Housing Supply Challenge
One of the fundamental reasons I remain optimistic about Australian residential property over the long term is the difficulty of bringing new housing to market.
Australia needs additional dwellings to accommodate population growth, household formation and changing housing requirements.
But constructing new homes isn't straightforward.
Developers need suitable land, planning approvals, finance, available trades and projects that remain commercially viable.
According to the Australian Bureau of Statistics, 16,953 dwellings were approved nationally in August 2026, a seasonally adjusted decline of 6.1% from the previous month.
Private sector approvals for dwellings other than houses fell 21.2% over the same period.
While approvals fluctuate from month to month and were higher than a year earlier, the figures demonstrate how uneven new housing supply can be.
The National Housing Supply and Affordability Council's 2026 report also highlights the importance of addressing Australia's housing supply and affordability challenges.
For property investors, I believe this makes established properties in desirable locations particularly interesting.
In some markets, an existing property can be purchased for substantially less than the cost of delivering a comparable new dwelling.
This isn't true of every suburb or property type, and older buildings can carry significant maintenance liabilities.
But understanding replacement costs can help investors identify properties offering relative value.
Sources: Australian Bureau of Statistics, Building Approvals August 2026; National Housing Supply and Affordability Council, State of the Housing System 2026.
3. Political Uncertainty May Influence Investor Confidence
Another factor worth watching is the next federal election is due between August 2027 and May 2028.
Housing affordability, taxation, investment incentives and the cost of living are all areas that could influence future policy debates.
My view is that the lead-up to an election can create uncertainty, particularly when investors are unsure whether existing policies will remain in place.
But it's important not to assume that governments will reverse particular policies, introduce new incentives or stimulate the property market.
Those outcomes are uncertain.
What I believe is worth watching is how changes in policy expectations and economic confidence influence buyer behaviour.
Property markets are driven by fundamentals, but confidence can also influence when people decide to act.
4. Some Buyers Are Waiting for Greater Certainty
When markets become difficult to predict, some prospective buyers choose to delay major financial decisions.
That can reduce competition for certain properties, creating opportunities for investors who have their finance organised and understand what they're looking for.
We've seen periods of significant uncertainty before, including during the Global Financial Crisis and the early stages of COVID-19.
Those periods were followed by opportunities in various Australian property markets, although the outcomes differed substantially by location and timing.
There is no guarantee 2027 will follow the same pattern.
But I do believe investors should pay attention when uncertainty causes otherwise suitable buyers to hesitate.
The best purchasing opportunities don't always arrive when everyone is feeling confident about property. Sometimes they appear when buyers are most uncertain about what happens next.
How Do You Know If You're Ready to Buy an Investment Property?
Before worrying about which suburb to buy in or whether property prices are about to rise, I would focus on three important questions.
1. Can You Afford the Weekly Cash Flow Shortfall?
One of the biggest mistakes investors make is focusing entirely on capital growth while overlooking the cost of holding the property.
It's important to understand that a property can be an excellent long-term investment while still requiring a financial contribution from its owner each week.
For example, let's assume you purchase an investment property that costs you $200 per week after rental income and ongoing holding expenses.
That's approximately $10,400 annually.
For some households, that may be manageable.
For others, it could place significant pressure on their finances.
You also need to allow for unexpected maintenance, vacancy periods, insurance increases and changes to interest rates.
A property that requires $200 per week today may eventually become cash flow neutral or positively geared if rents increase, expenses remain manageable or borrowing costs decline.
But that outcome is not guaranteed.
I would always recommend assessing whether you can comfortably afford the property under current conditions, including an appropriate financial buffer.
2. Do You Have a Deposit or Accessible Equity?
The second consideration is how you're going to fund the purchase.
There are generally two common pathways.
Option One: Using Cash Savings
If you're buying a $400,000 investment property, a 10% deposit would equal $40,000.
However, you'll also need to account for stamp duty, conveyancing, inspections and other purchasing expenses.
Depending on your circumstances and your lender's requirements, you may also need lenders mortgage insurance.
A $45,000 to $50,000 savings position might be a useful starting point for investigating a purchase at this price, but it won't necessarily cover every buying cost or meet every lender's deposit requirements.
Option Two: Using Equity in an Existing Property
If you already own your home and its value has increased, you may be able to access some of that equity to help fund an investment property.
For example, you might be able to borrow against your existing home's equity to fund an investment property deposit and associated purchasing costs.
This can reduce the amount of cash savings required.
Importantly, accessing equity isn't free money. It involves taking on additional debt, subject to lender approval and your borrowing capacity.
In some circumstances, interest on funds borrowed to acquire an income-producing investment property may be tax deductible.
The Australian Taxation Office assesses interest deductibility by reference to the purpose and use of borrowed funds, not simply the property securing the loan.
This is an area where I strongly recommend speaking with a qualified mortgage broker and accountant before structuring your borrowing.
3. What Is Your Actual Borrowing Capacity?
Having a deposit doesn't automatically mean you're ready to purchase.
Your income, existing debts, household expenditure and financial commitments all influence how much a bank is prepared to lend you.
Australian Prudential Regulation Authority settings in 2026 require APRA-regulated banks to assess new mortgage borrowers using a serviceability buffer of at least three percentage points above the loan interest rate.
That means borrowing capacity can be considerably different from what a buyer expects based purely on today's advertised mortgage rates.
Before looking at investment properties, I would speak with a mortgage broker and establish a realistic purchasing budget.
Once you understand your borrowing capacity, your available equity and the cash flow you're comfortable contributing, you can start identifying suitable investment opportunities.
Why Your First Investment Property Is Your Most Important
If your objective is to build a portfolio of five or ten properties, rather than simply own one investment, your first purchase becomes particularly important.
I've seen investors purchase properties that performed reasonably well in isolation but made it difficult to buy another asset.
Sometimes the issue was insufficient rental income.
Other times it was overpaying for the property, having limited opportunities to improve its value or simply using too much of their borrowing capacity.
The problem is that purchasing an investment property doesn't automatically put you in a stronger position to purchase another.
Your first property should ideally help create the financial foundation for your second purchase.
This is why I look at investment opportunities through three key considerations.
1. Can You Buy Below Market Value?
Buying well can create an immediate advantage.
If a property is genuinely worth more than the price you're paying, you may be acquiring some equity from the outset.
This might be achieved through strong negotiation, identifying overlooked properties or finding opportunities that don't appeal to the broader market.
However, a lower asking price doesn't automatically mean a property is undervalued.
You need to understand comparable sales, property condition, market demand and any underlying risks.
2. Can You Manufacture Equity?
I particularly like properties where there's an opportunity to increase value without relying entirely on the broader market.
This could include renovating an outdated apartment, improving a property's layout, completing suitable cosmetic improvements or investigating legitimate opportunities for additional accommodation.
For example, imagine purchasing an older apartment for $400,000 and spending $30,000 on renovations and associated costs.
If the renovated property is subsequently supported by comparable sales at $480,000, you've potentially created $50,000 in additional equity before other acquisition, finance and holding costs.
That could help position you for another purchase.
However, renovations don't automatically create value. Costs can overrun, valuations can disappoint, and some improvements add less value than investors expect.
Any renovation strategy needs to be supported by thorough research and realistic financial assumptions.
3. Will the Property Support Your Borrowing Capacity?
The third consideration is rental income.
This is particularly relevant when you're looking to build a larger property portfolio.
An investment that produces strong capital growth but requires substantial weekly contributions may eventually limit your ability to purchase another property.
Conversely, a property generating a higher rental yield may reduce holding costs and help support future borrowing capacity.
Banks don't necessarily assess rental income at its full face value, so strong yields won't always translate directly into greater borrowing power.
But the relationship between cash flow, debt and lending capacity is fundamental to successful portfolio building.
The goal is to find properties that offer an appropriate balance between capital growth potential, rental income and manageable risk.
Building a Property Portfolio: Think About Property Number Two Before Buying Number One
One of the most important lessons I've learnt through building our own portfolio is to think several purchases ahead.
Instead of asking only whether a property is a good investment, consider what it will mean for your next purchase.
Will it provide opportunities to increase equity?
Will its rental income help offset borrowing costs?
Will it use too much of your available borrowing capacity?
And will owning it make your financial position more resilient or more vulnerable?
For example, suppose you buy your first investment property and renovate it successfully.
You may create additional equity that can potentially be accessed for another deposit.
But before you can buy again, you'll still need sufficient income and borrowing capacity to satisfy lender requirements.
That's why it's important to understand both sides of property investing.
Equity helps fund future purchases. Cash flow helps you hold those properties. Borrowing capacity determines whether lenders will finance the next one.
When you understand how these three factors work together, you can begin approaching property investing as a long-term strategy rather than a series of unrelated purchases.
Where Would I Consider Investing in 2027?
As a buyers agent based in Cairns, I spend a significant amount of time analysing property opportunities across Cairns, the Northern Beaches, Port Douglas, and the Atherton Tablelands.
One area I believe deserves attention is established residential property where the purchase price compares favourably with the cost of building an equivalent property.
In parts of North Queensland, this can include established apartments and units offering attractive gross rental yields relative to their purchase prices.
These properties can be particularly interesting for investors who want to balance rental income with the potential for capital growth.
But there are important risks to consider.
In Cairns and other North Queensland markets, investors need to carefully investigate body corporate levies, sinking fund balances, insurance premiums, cyclone exposure, flood risk and the condition of the building.
A property might appear to deliver an excellent rental yield, only for unexpected body corporate expenses or major maintenance obligations to significantly reduce its actual return.
Location also remains critical.
Proximity to employment, schools, hospitals, transport, shopping and lifestyle amenities can influence both tenant demand and resale appeal.
I wouldn't recommend buying an investment property simply because it has the highest advertised yield.
I would rather purchase a property with sustainable tenant demand, manageable ownership costs and identifiable opportunities to improve its value.
For investors looking to build a substantial portfolio, those characteristics can be more valuable than chasing short-term price growth.
Should You Wait Until Interest Rates Fall Before Buying?
This is one of the most common questions I hear from prospective property investors.
And my answer is that I wouldn't make my entire investment decision around trying to predict interest rates.
If interest rates fall in the future, borrowing costs may decrease and property demand may strengthen.
But if you're waiting for rates to fall, you're also betting that property prices won't increase while you're waiting.
Equally, purchasing now carries its own risks. Rates could remain elevated, increase further or property values could decline.
There isn't a risk-free answer.
Instead, I would focus on what you can actually control.
Can you purchase a suitable property at a price supported by comparable sales?
Can you comfortably afford the repayments?
Does the property's rental income support your overall strategy?
And does the purchase leave you with enough financial flexibility to handle unexpected changes?
If those fundamentals make sense, I believe there can be good reasons to consider purchasing even when broader market confidence is subdued.
If they don't, waiting and improving your financial position may be the smarter decision.
My Three Biggest Pieces of Advice for Property Investors in 2027
After building our own portfolio and helping clients purchase investment properties, there are three things I would encourage anyone considering investing in 2027 to remember.
1. Fortunes Favour the Brave, But Only When the Numbers Make Sense
I believe uncertainty can create opportunity.
When buyers hesitate, competition for some properties may reduce, and investors who are financially prepared can sometimes negotiate more favourable terms.
But being brave doesn't mean taking unnecessary financial risks.
It means doing the research, understanding your financial position and being prepared to act when you identify a genuinely worthwhile opportunity.
2. You Might Be Closer to Buying Than You Think
I've spoken with plenty of people who assume they're years away from purchasing another property.
Sometimes that's true.
But others have accumulated more accessible equity than they realise, or have sufficient income to support an investment property without putting themselves under excessive financial pressure.
Until you review the numbers with a mortgage broker, you may not know what options are available.
Even if you're not ready to purchase today, understanding your position can help you establish a realistic plan.
3. If Nothing Changes, Nothing Changes
This is probably the most important lesson from my own property investment journey.
Ten years ago, we had to make a decision to start investing.
Those decisions involved sacrifice, uncertainty and financial risk.
Not every investment has been perfect, and we've learnt plenty of lessons along the way.
But the opportunities and financial freedom our portfolio provides today wouldn't exist if we'd never taken those first steps.
That doesn't mean everyone should rush out and buy an investment property.
It means that if financial independence is important to you, there needs to be a plan for achieving it.
And if property forms part of that plan, the first step is understanding what you can realistically afford and what type of investment will help you move towards your longer-term goals.
Final Thoughts: Is 2027 the Right Time to Start Investing in Property?
I believe 2027 could be an interesting period for Australian property investors.
High borrowing costs, uncertainty around inflation and ongoing housing supply challenges are creating a complicated environment.
But uncertainty doesn't necessarily mean there are no opportunities.
In fact, some of the more attractive buying opportunities can emerge when market confidence is weak.
The key is not to try to predict the exact bottom of the property market.
It's to establish a sound investment strategy, understand your finances and focus on acquiring assets that can support your long-term goals.
Whether you're buying your first investment property or looking to grow an existing portfolio, I believe the focus should remain the same.
Buy well. Manage your cash flow. Create equity where possible. And make sure every purchase positions you for the next stage of your investment journey.
That's the approach that's helped us build our own property portfolio, and it's the philosophy we bring to helping our clients at The Buyers Co.
Ready to Start Building Your Property Portfolio?
At The Buyers Co, we help property investors identify, assess, negotiate and purchase investment properties across Cairns and North Queensland.
Whether you're buying your first investment property, looking to access equity in your existing home or planning your next acquisition, we can help you understand the opportunities available and develop a strategy aligned with your goals.
Our approach focuses on finding properties that make financial sense, not simply buying for the sake of investing.
Let's discuss your investment goals and what your next property needs to achieve.
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Frequently Asked Questions About Property Investing in 2027
Is 2027 a good year to buy an investment property in Australia?
2027 may offer opportunities for prepared investors, particularly if uncertainty reduces competition in particular markets. However, the outlook will vary by location, property type and economic conditions. Investors should focus on financial suitability and property fundamentals rather than attempting to predict short-term market movements.
How much deposit do I need for a $400,000 investment property?
A 10% deposit would be $40,000, but you'll generally need additional funds for purchasing expenses and potentially lenders mortgage insurance. Lender deposit requirements vary, and some buyers may be able to use equity from an existing property.
Can I buy an investment property using equity in my home?
Potentially, yes. If you have sufficient accessible equity and satisfy lender borrowing requirements, you may be able to borrow against your home to help fund an investment purchase. Additional borrowing increases your financial commitments, so professional lending and tax advice is important.
Is it better to buy a positively geared or negatively geared investment property?
Neither approach is automatically better. Positively geared properties can provide additional cash flow, while negatively geared properties may have other characteristics that suit an investor's objectives. The right approach depends on your income, tax circumstances, borrowing capacity, risk tolerance and long-term investment strategy.
How do you build a portfolio of five investment properties?
Building a portfolio generally requires a combination of sufficient deposits or equity, ongoing borrowing capacity, manageable cash flow and suitable property selections. Each purchase should be assessed for its impact on your ability to acquire and maintain future investments. There is no guarantee that every investor will be able to finance five properties.
Should I wait for interest rates to fall before investing?
Not necessarily. Lower interest rates could reduce repayments, but they could also influence buyer demand and property prices. Equally, rates may remain elevated or rise. A sound investment decision should be based on current affordability, appropriate financial buffers and long-term objectives rather than depending on future rate cuts.
Disclaimer: This article provides general information and personal investment opinions only. It does not constitute financial, taxation, legal or credit advice. Property investing involves risks, including changes in property values, rental income, interest rates and borrowing capacity. Seek advice from appropriately qualified professionals before making investment decisions.
Research and References
Reserve Bank of Australia, Monetary Policy Decision, 29 September 2026
Australian Bureau of Statistics, Building Approvals, August 2026
National Housing Supply and Affordability Council, State of the Housing System 2026
Australian Taxation Office, Rental Property Interest Expenses
Australian Electoral Commission, Next Federal Election Timing
