Competition for investment-grade property is expected to intensify as new development pipelines remain well below historical levels.
Forecasts suggest that constrained supply will continue to shape the market for the rest of the decade.
CBRE’s Pacific Real Estate Market Outlook 2026 projects that new development supply will remain between 20% and 50% below long-term averages through to at least 2030. This prolonged shortfall is limiting choice for both investors and renters.
Head of Pacific Research Sameer Chopra notes that reduced development activity is narrowing the range of available options. With fewer new assets coming online, competition for existing properties is expected to increase, particularly in well-located and high-quality segments.
Chopra suggests investors are facing a clear strategic choice. One option is to secure premium assets that are likely to outperform in both rental income and capital growth. The alternative is to purchase existing stock, as new construction costs remain high and rental growth may take many years to fully offset development expenses.
Certain markets are tipped to outperform. Apartments on the Gold Coast and in Perth are highlighted as likely beneficiaries of strong demand and limited supply. Assets located close to emerging infrastructure are also expected to deliver above-average results.
Future apartment supply remains a key concern. The report forecasts that new apartment completions will average around 60,000 dwellings per year between 2026 and 2030. This falls well short of estimated demand of 75,000 to 85,000 apartments annually.
The imbalance between supply and demand is expected to place sustained upward pressure on rents. CBRE predicts median rents could rise by $180 per week, or 24%, between 2025 and 2030. Such increases would further strain affordability while improving returns for existing investors.
These conditions are reshaping investor behaviour. Rather than chasing volume, many are prioritising quality, location, and long-term scarcity. Assets that combine strong rental appeal with limited future competition are becoming increasingly sought after.
For renters, the outlook remains challenging. Limited supply, rising rents, and constrained new development are reinforcing a highly competitive environment. Without a material uplift in construction activity, these pressures are unlikely to ease in the near term.
