The Australian economy is officially entering an “upswing phase,” with GDP growing by 2.5% over 2025 and a solid 0.8% jump in the final quarter. While much of the headlines focus on inflation, the real story for investors is in the National Accounts: housing investment is now a primary engine of this growth, contributing 0.1 percentage points to the national bottom line.
What actually matters here is the Household Financial Pivot. For the first time in several quarters, we are seeing a “dual-positive” for households: disposable income rose by 1.8% while household savings also trended upward (reaching 6.9% in December). This suggests that the “cost-of-living crunch” is beginning to ease for productive households, providing more “dry powder” for investment. Interestingly, discretionary spending rose by 0.4% while spending on essentials fell—a clear sign of stabilizing consumer confidence.
From a real estate perspective, the “Vertical Recovery” is in full swing. New dwelling construction rose by 1.4%, driven heavily by apartment projects along the eastern seaboard. Westpac economists are now pointing to a “healthy pipeline of projects” that will support construction through 2026 and 2027.
At Infinite Wealth, we see this 1.8% rise in disposable income as a massive lead indicator. When households have more surplus cash, their borrowing capacity improves, and their ability to service investment debt strengthens. This “upswing phase” is the window of opportunity to position yourself before the full weight of this new capital hits the established housing market.
