Australia’s real estate market continues to attract international capital, supported by strong housing demand and a stable institutional environment.  

RSM’s latest Australia Real Estate & Construction: Sector outlook examines the challenges and opportunities emerging across the market. Adam Crowley, RSM’s National Real Estate & Construction Leader in Australia, explains what global investors should consider when assessing Australian property and infrastructure projects.

What is Australia’s biggest appeal for global real estate investors?

“Across the country, there’s a sustained demand for housing due to population growth and limited availability in major metropolitan and regional markets.  

“This means pricing has stayed strong and sales pipelines are robust for completed, well-located projects. Global investors can be confident in potential exit values. Strong sales activity also increases the likelihood that completed properties will sell within expected timeframes.

“While not without its challenges, Australia presents a stable, growing market for development and investment.”

Why is real estate project viability becoming more challenging in Australia?

“There’s a risk of planning and approval delays, which lengthen development timeframes and, in turn, puts pressure on returns. To address this challenge, investors can work with local expertise to test planning assumptions and build contingencies into project models.

“Joint ventures can be particularly effective. In these scenarios, a local partner contributes development management, contractor relationships, and knowledge of planning authorities and customer demand, while the global investor provides capital and international experience.”

Why should global investors pay close attention to planning approvals and policy certainty?  

“Planning and approval delays can slow the pace of development and increase costs. Each additional month required to obtain approval can raise holding costs, interest expenses, and exposure to changing construction prices.  

“State governments in Australia are introducing reforms intended to accelerate approvals and increase housing supply. Measures include faster, more targeted assessment pathways, more standardised controls for medium-density housing, and closer coordination between residential development and supporting infrastructure.

“Further progress will be needed to meet housing demand, so investors should build realistic timelines into their financial models and work with advisers who understand the approval environment.”

What should global investors know about capital availability and banking relationships in Australia?

“Australia has strong capital support from local banks, but the speed of funding is often as important as its availability. Historically, the issue has been how fast capital can be deployed to move a project forward. Even when interest rates are manageable, delays eat into returns.  

“This has helped drive the growth of private credit in Australia, with non-bank lenders such as credit funds and high-net-worth investors providing faster, more flexible funding to keep projects moving.”

How can early contractor engagement and shared-risk models give global investors more certainty?  

“More and more often, we’re seeing developers involve contractors during the design and feasibility phases. Contractors can test buildability, advise on materials and sequencing, identify supply-chain issues, and provide current pricing. This can produce a more reliable budget for global investors and reduce the risk that a fully designed project later proves too expensive or difficult to build.

“Although less common than early contractor engagement, shared-risk models can provide further certainty by allocating risks to the party best able to manage them. However, they require trust and strong governance to work.”

How can technology, modular construction, and sustainability improve project outcomes?  

“Modular construction and modern methods of construction (MMC) are key focus areas for many state governments. Factory production and prefabricated components, for instance, can shorten on-site programmes and reduce material waste.  

“Reducing waste lowers construction costs and a project’s environmental impact. The benefits of sustainability can be extended through energy-efficient design, which brings down utility costs for residents, strengthens buyer and tenant appeal, and helps protect asset value as sustainability standards evolve.

“Nationally, the sector recognises the need to innovate to keep pace with demand while managing costs. This creates opportunities for global investors, developers, and manufacturers with established modular-construction or sustainability expertise.”

Where are the strongest opportunities for global investors in Australian real estate and infrastructure?  

“The build-to-rent sector in Australia is at an earlier stage of development than it is in comparable global markets, but it is gaining traction and beginning to expand. Growing interest from governments, developers, and institutional capital is helping to build the project pipeline and strengthen the sector’s prospects.

“This creates opportunities for global investors to enter a market with strong rental demand, limited supply, and scope for continued growth. Investment may take the form of direct development or joint ventures with experienced Australian partners.”

What will the next five years look like for Australia’s real estate and construction sector?

“While the sector will continue to face challenges, the next five years will be shaped by sustained housing demand, stabilising construction costs, and growing use of MMC.

“Australia’s stable political and regulatory environment should also support long-term confidence among developers and investors.

“Projects with reliable access to essential infrastructure are likely to remain attractive, supported by ongoing government investment in transport, utilities, and public services.”

To explore the trends currently shaping investment opportunities, project viability, and delivery risk in greater detail, read RSM’s Australia Real Estate & Construction: Sector outlook.

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