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Home › Market Insights › Australian Property Market House Price Expectations 2026
If you own a home, are thinking about buying, or are simply trying to understand where the Australian property market is heading, 2026 is an important year to watch. Many Australians feel confused right now. Prices rose sharply in some cities, slowed in others, and interest rates made borrowing more expensive. Because of this, it is normal to feel uncertain about what comes next.
This guide explains the house price expectations for 2026 in Australia. Each section breaks down what is happening, why it matters, and how it could affect everyday decisions like selling your home, buying your first property, or investing for the future.
Key Takeaways Australian house prices in 2026 are expected to grow slowly and steadily rather than surge or crash. Tight housing supply and strong population growth continue to support prices across most cities. Interest rate stability matters more than large cuts, with predictability helping buyer confidence. Capital cities will perform differently, with affordability driving stronger growth in Brisbane, Perth, and Adelaide compared to Sydney and Melbourne. Buyers should focus on financial readiness and long-term value rather than trying to time the market. Sellers need realistic pricing and strong presentation to attract cautious but active buyers. Investors in 2026 should prioritize rental yields, cash flow, and risk management over rapid capital growth
Key Takeaways
Next Step: Selling, buying, or investing in 2026 can feel overwhelming, especially when the market sends mixed signals. Compare agents now to find someone who understands your area, your goals, and can guide you forward with confidence.
Before diving deeper, here is an easy-to-understand overview of what 2026 may look like.
No one can predict house prices with complete certainty. Forecasts are not guarantees. However, they are still useful because they help you plan. Understanding likely price ranges and risks allows you to make decisions with your eyes open, rather than reacting emotionally to short-term news.
Think of it like planning a long trip. You cannot control the weather, but checking the forecast helps you pack better and choose the safest route. In the same way, understanding house price expectations helps you decide when to sell, how much to budget, or whether holding off makes sense.
By the end of this article, you will understand:
This information is designed to help you feel calmer and more confident, especially if this is your first major property decision.
Before looking ahead to Australian Property Market House Price Expectations 2026, it helps to clearly understand where the market is starting from. Many forecasts are confusing because they jump straight into predictions without explaining the recent past. This section breaks down what actually happened in 2024 and 2025, and why those years still matter as we move into 2026.
As Australia heads into 2026, house prices are not moving at the same speed everywhere. Some cities are still seeing steady growth, while others are showing slower or uneven movement. What is important to understand is that the market is no longer in a boom phase, but it has also not collapsed.
Across most capital cities:
The market has momentum, but it is bifurcated. While Sydney and Melbourne have entered a ‘soft landing’ phase with near-zero growth, the mid-sized capitals are still seeing double-digit annual gains. With the cash rate steady at 3.60% and listing volumes 20% below normal levels, the ‘controlled momentum’ is essentially a result of a chronic supply shortage meeting a resilient buyer base.
The biggest change in 2024 was the sharp rise in interest rates. When interest rates go up, mortgage repayments increase. This means buyers cannot borrow as much as they could before, so many people expected house prices to fall quickly and sharply.
However, that did not happen in most parts of Australia. The main reason is that higher interest rates alone do not cause house prices to fall. Prices usually fall when many homeowners are forced to sell at the same time, and that situation did not occur.
Here is why prices held up better than expected:
In simple terms, house prices do not fall just because borrowing becomes more expensive. Prices fall when supply suddenly increases because many people have no choice but to sell. In 2024, that pressure never arrived, which is why prices in many areas remained stable or even rose despite higher interest rates.
In 2025, the Australian property market began to settle after a period of uncertainty. Buyers had spent much of the previous year waiting to see if prices would fall sharply because interest rates were higher. Over time, many buyers realized that large price drops were not happening in most areas. Instead of continuing to wait, they adjusted their expectations and started looking again, especially if they needed a home rather than a bargain.
As the year went on, confidence slowly returned. This was most noticeable in cities and suburbs where there were not enough homes available for sale. When buyers see limited choice and steady demand, they often feel more comfortable making a decision, even if borrowing costs remain high.
By the end of 2025, the market was better described as “cooling but still rising” rather than broadly flat. National prices finished the year higher, but the pace slowed into December, with Sydney and Melbourne easing slightly while other capitals and many regional areas continued to record gains. This slowdown, combined with affordability pressures and the shift from rate cuts to “rates on hold” thinking, is the base from which many 2026 price expectations are now forming.
The reason 2026 matters so much is because multiple forces are lining up at the same time. Interest rates may begin to ease or at least stop rising. Population growth remains strong. Housing supply is still not keeping up with demand.
For homeowners, this creates a more stable selling environment. For buyers, it means competition may stay stronger than expected. For investors, it signals a shift toward careful, long-term planning rather than quick gains.
In simple terms, 2026 is less about dramatic changes and more about direction. The market is choosing a path, and the choices made by buyers and sellers now will shape prices for years to come.
House prices do not move randomly. They respond to a small number of powerful forces that affect how confident people feel, how much they can borrow, and how many homes are available. Understanding these basics makes Australian Property Market House Price Expectations 2026 much easier to follow.
Below are the most important factors shaping the market in 2026, explained in plain language.
Interest rates are one of the biggest influences on house prices because they directly affect how much your monthly mortgage repayment will be. When interest rates go up, home loans become more expensive, which means buyers can usually borrow less money. When rates go down or stay steady, repayments become easier to manage, and buyers often feel more confident about entering the market.
As Australia moves into 2026, interest rates are expected to be much closer to their highest point than where they started in recent years. This matters because the biggest shock has already happened. Even small rate cuts can make a noticeable difference to household budgets and confidence, especially for buyers who have been waiting on the sidelines. In many cases, stability is just as important as rate cuts. When rates stop changing frequently, people feel more comfortable making long-term decisions like buying a home.
For first home buyers, this means borrowing power may slowly improve, but it does not mean homes will suddenly become cheap. Careful budgeting is still important, and buyers should leave room for future rate changes. For existing homeowners, stable rates lower the risk of financial pressure and reduce the chance of forced selling. Investors often react quickly to rate movements, so even modest easing can bring more investor demand back into the market.
In simple terms, 2026 is expected to feel calmer and less stressful than recent years. Even if interest rates do not fall sharply, the fact that they are more predictable can make a big difference to how confident buyers, sellers, and investors feel.
Inflation affects how much everyday life costs. This includes essentials like groceries, fuel, electricity, insurance, and childcare. When these costs rise quickly, households have less money left over at the end of the month. This makes people more cautious about taking on large financial commitments, such as a home loan.
If wages do not increase at the same pace as living costs, many buyers delay purchasing property or reduce how much they are willing to spend. This does not mean people stop wanting to buy homes. It means they become more careful and selective.
Heading into 2026, inflation is expected to be lower and more stable than in earlier years. This helps households plan their budgets with more certainty. Wage growth has improved, but it has not been equal across all jobs and industries. Some workers have seen solid pay rises, while others are still catching up. As a result, housing affordability remains stretched, particularly in major capital cities where prices are already high.
For house prices, confidence matters more than headlines. When people feel secure in their income and believe they can manage mortgage repayments over the long term, they are more willing to buy. If wages continue to grow faster than inflation, buyer confidence tends to strengthen. If everyday costs rise again unexpectedly, buyers may step back or lower their budgets.
This ongoing balance between wages and living expenses is one of the main reasons experts expect house price growth in 2026 to be steady rather than fast. The market is supported, but households are still careful, which keeps price growth under control.
Population growth is one of the strongest forces behind housing demand. At its most basic level, when more people live in Australia, more homes are needed. Every new household needs somewhere to live, whether that is a rental property or a home they plan to buy.
Australia continues to experience strong population growth, and a large part of this comes from overseas migration. People arriving from other countries need housing immediately. Most start by renting, which increases pressure on rental markets, and many later move into buying a home once they settle into work and community life.
This population growth affects the housing market in several clear ways:
For home sellers, this ongoing population growth helps support demand even when interest rates are high and affordability feels stretched. There are simply more people looking for homes than there are homes available. For buyers, it helps explain why prices can continue to rise even when borrowing feels expensive. Demand does not disappear just because loans cost more. For investors, strong migration usually leads to lower vacancy rates, steadier rental income, and improved rental yields.
This is one of the key reasons many experts do not expect large nationwide house price falls in 2026. When population growth remains strong and housing supply stays limited, prices tend to be more resilient, even during challenging economic periods.
Housing supply simply means how many homes are available for people to buy or rent at any given time. When there are plenty of homes on the market, buyers have more choice and prices usually grow more slowly. When there are very few homes available, buyers compete with each other, which can push prices higher.
In many parts of Australia, housing supply has been falling behind demand for several years. This means the number of people looking for homes has been growing faster than the number of homes being built or sold. This imbalance is one of the main reasons prices have stayed high, even when interest rates increased.
There are several reasons why not enough new homes are coming onto the market.
Each of these factors reduces the number of homes available at any one time.
When there are not enough homes, prices can remain strong even if buyer demand softens slightly. Buyers may have fewer options, but they still need somewhere to live, especially families looking for homes near jobs, schools, and transport.
This is why established suburbs often hold their value better. New housing is harder to add in these areas, so competition stays high. Even small changes in supply can have a big impact on prices.
The key takeaway is simple. High house prices are not only caused by lots of buyers. They are also caused by too few homes being built or sold to meet the needs of a growing population.
No single factor determines house prices on its own. In 2026, the combination of stable interest rates, ongoing population growth, and limited housing supply is expected to keep prices moving upward, but at a controlled pace.
Now that we have covered the key forces shaping the market, it is time to look at what they mean for Australian Property Market House Price Expectations 2026 at a national level. This section focuses on ranges and scenarios rather than exact numbers, because property forecasts are about direction, not precision.
Most Australian property analysts expect national house prices to move within a moderate growth range in 2026. Instead of sharp booms or deep declines, the market is likely to experience gradual change.
At a national level, expectations generally fall into this range:
For everyday homeowners, this means 2026 is more about protecting and slowly building value rather than chasing fast gains.
In this scenario, the market achieves a “soft landing” where growth is sustainable but entry remains possible for new participants.
When these conditions come together:
As a result, house prices rise more clearly in these areas, although growth remains manageable rather than extreme. Homes that are well priced and well presented attract strong interest, sometimes with multiple buyers competing.
This scenario tends to favor sellers who prepare their homes properly and price them realistically from the start. It also benefits buyers who act early, because waiting too long can mean facing more competition and higher prices later in the year.
The base case is the outcome that most economists and housing experts believe is most likely for 2026. It assumes nothing dramatic happens in the economy. There is no major recession, no sudden spike in unemployment, and no surprise interest rate shocks. Instead, conditions remain fairly steady.
In this scenario:
Because of these factors, house prices are expected to rise gradually rather than sharply. This can feel disappointing for buyers who are waiting for large price drops, but it is reassuring for homeowners who want to protect the value of their property.
Many experts call 2026 a normalization year because the market is moving away from extreme highs and lows. Instead of boom conditions or sudden declines, prices are adjusting at a more sustainable pace that reflects real demand, affordability, and long term fundamentals.
The primary risk for 2026 isn’t a crash, but a “growth stall” triggered by persistent inflation.
Many people feel uncertain when experts offer conflicting predictions. This is because forecasts rely heavily on underlying assumptions. Even minor shifts in interest rates, migration trends, or construction activity can lead to significantly different outcomes. Forecasts are currently split because of the February RBA pivot.
That is why it is best to use forecasts as guides, not promises. Understanding the range of outcomes helps you prepare for different possibilities rather than relying on a single number.
While national forecasts are useful, Australian property markets are highly local. This means house price expectations for 2026 can look very different depending on the city.
Sydney remains Australia’s most expensive market, with a median dwelling value of $1,280,613 as at December 2025. After strong gains earlier in the cycle, 2025 finished with moderate annual growth of 5.8%, and Sydney values dipped -0.1% in December. That pattern supports your “stable rather than booming” message.
Supply is still a key support. SQM reported Sydney total listings fell to 27,012 in December, down 20.3% month on month, which is consistent with thin stock in many well-located pockets.
Rental conditions eased seasonally but remain tight enough to keep investor demand “in the mix”. Sydney’s vacancy rate rose to 1.8% in December (from 1.4% in November), with 13,252 dwellings recorded as vacant.
Upside is capped by affordability and rate sensitivity, but limited stock and income depth should keep prices resilient unless employment conditions materially weaken. Cotality’s own outlook flags a “softer landing” for 2026, with affordability and rate uncertainty weighing, but no material supply response expected.
Melbourne’s end-2025 position is consistent with a “slower period” narrative. The median dwelling value was $827,117 at December 2025, with annual growth of 4.8% in 2025, and a -0.1% dip in December.
Melbourne also continues to look the most balanced of the major rental markets. SQM reported a 2.0% vacancy rate and 10,667 vacancies. That is still not “loose”, but it is less tight than Perth, Adelaide and Hobart, which helps explain why Melbourne can feel less frantic for buyers.
On supply, SQM reported total Melbourne listings declined 16.6% month on month to 34,719 in December.
A steadier recovery bias rather than a sharp surge. Demand should be supported by population growth, but buyers will stay price-sensitive while rates remain restrictive.
Brisbane remains one of the stronger momentum markets. Cotality reported Brisbane’s median dwelling value reached $1,036,323 in December 2025, after 14.5% annual growth in 2025, including a strong +1.6% rise in December and +5.6% over the quarter.
Housing supply is still lagging demand. SQM noted Brisbane listings fell 19.6% in December, and were also 19.6% lower than December 2024, reinforcing that sellers remain scarce relative to buyer depth.
Rental conditions are still tight. Brisbane’s vacancy rate rose to 1.2% in December (from 1.0%), with 4,101 vacancies recorded.
As Brisbane moves into 2026, population growth continues to support demand. More people still need places to live, and new housing supply has not kept up. This imbalance helps support prices, even if growth slows after strong recent gains.
That said, prices may rise at a slower pace compared to the past few years. For buyers, competition can still feel intense, particularly for detached houses in popular suburbs. Apartments may offer more choice. For sellers, homes in good locations with practical layouts are likely to remain attractive, even if the pace of price growth cools.
Both Perth and Adelaide have structural “affordability plus scarcity” support, but Perth is the tighter market on rentals and has been the stronger grower on prices.
Perth ended 2025 with a median dwelling value of $940,635 and 15.9% annual growth, including +1.9% in December and +7.6% over the quarter. Perth’s rental market is extremely tight, with a 0.7% vacancy rate and 1,384 vacancies recorded.
Adelaide ended 2025 with a median dwelling value of $902,249 and 8.8% annual growth, also rising +1.9% in December and +5.1% over the quarter. Adelaide’s vacancy rate was 0.9%, with 1,398 vacancies recorded.
SQM’s listings commentary reinforces the same story, both Perth and Adelaide saw meaningful listing pullbacks in December, consistent with ongoing supply constraints.
In 2026, Perth and Adelaide may continue to record stronger percentage growth than the national average. However, it is important to understand that this does not mean they are more expensive overall. Prices can grow faster in percentage terms because they started from a lower base.
These markets do tend to move faster because they are smaller, but your draft will be stronger if it anchors that point to current conditions.
Canberra ended 2025 at a median dwelling value of $893,907, with 4.9% annual growth and +0.2% in December. Vacancy rose to 1.9% with 1,142 vacancies, indicating slightly more breathing room than Perth, Adelaide and Hobart, but still not loose.
Hobart is the standout on rental scarcity. Its vacancy rate was 0.4% with just 124 vacancies recorded, while dwelling values finished 2025 at a median of $720,341 and 6.8% annual growth.
Darwin is the most volatile, and it also posted the strongest annual gain in the Cotality series at +18.9% in 2025, taking the median dwelling value to $586,912. Vacancy sat at 1.0% with 255 vacancies recorded.
Local drivers matter more than national headlines, but the baseline entering 2026 is still one of generally tight rental conditions and constrained supply. That tends to limit the probability of large price falls without a localised jobs shock.
Even though most forecasts for Australian Property Market House Price Expectations 2026 point toward steady or moderate growth, no market moves in a straight line. It is important to understand what could change expectations and why forecasts always come with conditions.
This section explains the main risks in plain language, so you know what to watch without feeling overwhelmed.
Australia is connected to the rest of the world through trade, finance, and investment. When major economies struggle, it can affect Australia even if local conditions seem strong.
Global risks that matter include:
If a global shock occurs, buyers often pause before making big financial decisions. Banks may also tighten lending rules. This usually slows price growth rather than causing immediate price falls. Past downturns show that Australian housing often holds up better than expected, especially in areas where there are not enough homes available.
Most forecasts for 2026 assume interest rates stay steady or fall slowly. The real risk is not just whether rates go up or down, but how suddenly they change.
If interest rates rise again:
If interest rates fall faster than expected:
The key takeaway for first time readers is that markets handle predictable conditions better than surprises. Even higher rates can be managed if people know what to expect.
Government policies can influence the housing market quickly, sometimes within weeks of being announced.
Policies that can affect prices include:
While these policies often aim to improve affordability, they can sometimes increase demand faster than supply. This can push prices up in the short term. That is why policy announcements often lead to sudden increases in buyer activity, even before the changes officially begin.
Job security plays a major role in housing decisions. People are far more likely to buy or upgrade when they feel confident about their income.
Risks appear if:
So far, employment conditions have remained relatively strong, which is one reason house prices have not fallen sharply. If job conditions weaken, it would be a clear signal that demand could soften.
It is common to assume that any risk will lead to falling house prices. In reality, housing markets are influenced by many forces at the same time.
In 2026:
These factors can offset economic risks, particularly in desirable locations. This is why most analysts expect controlled outcomes rather than extreme price swings.
Match with top agents in your postcode who understand current supply shifts.
As we look ahead, Australian Property Market House Price Expectations 2026 point to a calmer, more balanced phase for housing across the country. This is not a boom driven by cheap money, and it is not a crash driven by forced selling. Instead, 2026 is shaping up to be a year where fundamentals matter more than hype.
For homeowners, this means values are likely to be supported by strong population growth and ongoing housing shortages, even if growth feels slower than in previous cycles. For buyers, it means patience and preparation matter more than trying to outguess the market. For investors, it signals a return to disciplined decision-making focused on cash flow, location, and long-term demand.
The most important reminder is that there is no single Australian property market. Outcomes will differ by city, suburb, and even street. Forecasts should be used as guidance, not guarantees. They are tools to help you plan, not promises of what will happen.
If you are selling, buying, or investing in 2026, the strongest position comes from understanding your local market, your personal finances, and your long-term goals. When those align, market conditions become something you can work with rather than fear.
Most forecasts expect Australian house prices to rise modestly in 2026. Growth is likely to be uneven, with stronger results in cities and regions where housing supply is tight and demand remains strong. Large nationwide price falls are not the main expectation.
For many buyers, 2026 can be a reasonable year to buy if finances are stable and the purchase is long term. Prices are expected to move gradually rather than surge, which can reduce pressure compared to boom conditions. Buying should be based on readiness, not trying to time the market perfectly.
Interest rates are expected to be more stable in 2026 than in previous years. Stability alone can improve confidence, even if rates do not fall sharply. Sudden changes matter more than small moves, and predictable rates generally support steady housing markets.
Cities with relative affordability, strong population growth, and limited housing supply are expected to perform better. This may include parts of Brisbane, Perth, Adelaide, and selected regional hubs. Growth is likely to be more moderate in higher-priced markets like Sydney and Melbourne.
While possible in specific locations, a broad nationwide fall is not widely expected. Price declines would likely require a combination of rising unemployment, higher interest rates, and increased forced selling. Tight housing supply may limit the size of any downturn.
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