Australian Property Market – Prices, Trends, Forecast [January 2026]

Sydney

• • Market Performance: Sydney’s housing market closed the year with a modest easing after a prolonged period of growth, as monthly values slipped marginally by 0.1% and the median dwelling price settled at $1,280,613. While momentum has softened, current conditions suggest the market is stabilising near its recent peak rather than entering a sustained downturn.

• • Key Insight: After a minor late-year softening, Sydney’s housing market remains near peak levels, with prices still underpinned by ongoing supply constraints and positive annual growth, particularly in more affordable segments. Looking ahead, momentum is expected to ease and become more selective, with market outcomes increasingly determined by affordability and location rather than broad-based price growth.

Read More: Latest Property Market Update for Sydney

Melbourne

• • Market Performance: Toward the end of the year, Melbourne’s housing market experienced a mild softening after a period of steady gains. Despite the late slowdown, dwelling values rose 4.8% over 2025, leaving the median price at $827,117 and confirming the city’s overall positive performance for the year.

• • Key Insight: Melbourne closed the year with moderate price growth but showed signs of cooling toward the end. Affordability constraints and weaker conditions in higher-priced segments weighed on performance, while limited supply is expected to help steady the market through a slower and more cautious 2026.

Read More: Latest Property Market Update for Melbourne

Brisbane

• • Market Performance: Brisbane ended the year with solid momentum, maintaining its position as one of the strongest-performing capital city markets. Prices lifted at the end of the year and finished 2025 up 14.5%, with dwelling values back at peak levels and the median price reaching $1,036,323.

• • Key Insight: Heading into 2026, Brisbane’s housing market remains well positioned after an exceptional period of growth. While affordability pressures and interest rate uncertainty are likely to temper momentum, limited supply should support prices, pointing to slower and more uneven growth concentrated in areas where value and demand remain aligned.
    

Read More: Latest Property Market Update for Brisbane

Adelaide

• • Market Performance: Adelaide closed the year with dwelling values still edging higher and remaining at record levels, continuing to outperform several larger capitals. Despite increasing sensitivity to interest rates and cost-of-living pressures, the market has shown resilience, with the median dwelling value sitting around $902,000.

• • Key Insight: Moving into 2026, Adelaide’s housing market remains firmly supported by record-high values and solid growth. While affordability pressures are expected to slow momentum, tight supply and steady demand should underpin prices, leading to more varied outcomes across different price points and locations.

Read More: Latest Property Market Update for Adelaide

Perth

• • Market Performance: Perth closed the year with strong price momentum, finishing 2025 at peak levels. The median dwelling value reached $940,635, reflecting a market that has delivered substantial gains and continues to show firm underlying conditions.

• • Key Insight: As 2026 begins, Perth’s housing market remains well supported following a strong year of growth. While affordability pressures and interest rate expectations are likely to temper momentum, limited supply should help stabilise conditions, pointing to slower and more uneven outcomes rather than a sharp downturn.

Read More: Latest Property Market Update for Perth

Canberra

• • Market Performance: Canberra ended the year on a steady footing, with dwelling values posting modest gains after a period of earlier volatility. Prices finished 2025 higher than they began, though growth trailed most other capitals, leaving the median dwelling value just under $900,000.

• • Key Insight: Looking ahead, Canberra’s housing market is expected to remain stable as it moves into 2026. Although growth is likely to stay more subdued than in other capitals, tight supply and steady demand should support prices, pointing to gradual and uneven gains rather than a strong acceleration.

Read More: Latest Property Market Update for Canberra

Hobart

• • Market Performance: Hobart closed the year with renewed momentum, extending its recovery from earlier declines. Dwelling values posted solid annual growth, positioning the city among the stronger mid-sized capitals, with resilient demand and limited supply continuing to support the market despite slower conditions than during the pandemic peak.

• • Key Insight: As the new year begins, Hobart’s housing market appears steady and well supported. While price growth has been measured and remains below prior peaks, underlying supply constraints and ongoing demand point to continued resilience, with gradual gains likely to define conditions in 2026.

Read More: Latest Property Market Update for Hobart

Darwin

• • Market Performance: Darwin finished the year with stronger momentum than most capitals, standing out as national conditions began to cool. Supported by relatively affordable pricing, limited supply, and ongoing investor demand, the market enters 2026 from a position of strength despite a more cautious broader outlook.

• • Key Insight: By the end of 2025, Darwin had emerged as one of the country’s top-performing housing markets, pairing strong price growth with comparatively affordable values. Although momentum is expected to ease, tight supply and solid rental demand should continue to support the market, leaving Darwin well placed in a softer national environment.

Read More: Latest Property Market Update for Darwin

Australian Property Market Trends

This table highlights how dwelling values have changed across Australia over the past 5 years and since the first interest rate cut in February, showing which markets are still climbing and which ones have softened from their peak. It’s a helpful snapshot for understanding long-term growth and current momentum especially for identifying markets that are peaking and slowing.

Australian Property Market Forecast

The Australian banks forecast:

• • ANZ predicts a 5-6% increase in capital city property prices in 2024, with Brisbane expected to see the highest rise at 9-10%, Perth property values could go up by 1-11%, Sydney by 4-5%, and Melbourne prices by 2-3%.

• • CBA forecasts a 5% rise in capital city prices, with some variations: Brisbane is anticipated to grow by 6%, Melbourne and Perth by 5%, Sydney by 4%, and Adelaide by 1%.

• • NAB projects a 5.4% average increase across the capitals, with Brisbane expected to see a 6.5% rise, Perth and Adelaide by 6.2%, Melbourne by 5.5%, Sydney by 5%, and Hobart remaining flat.

• • Westpac expects a 6% growth across the combined capitals, with Perth leading at 10%, followed by Brisbane at 8%, Sydney at 6%, Adelaide at 4%, and Melbourne at 3%

For the second half of 2024 this means:

• • Modest value increases expected: The national housing market is likely to see modest value increases through the end of 2024, driven by a persistent imbalance between supply and demand.

• • Affordability constraints: Affordability pressures, high interest rates, and cost-of-living challenges are expected to temper growth, especially in higher-priced markets.

• • Sustainability of growth: High growth levels in cities like Perth, Adelaide, and Brisbane may be difficult to sustain as affordability becomes more stretched.

• • Shift to affordable segments: Demand is increasingly focused on more affordable market segments, with significant growth in the lower quartile of the market.

• • Construction Sector Constraints: Ongoing issues in the construction sector, including labor shortages and competition from public infrastructure projects, are likely to keep supply constrained, supporting property values in the longer term.

Australian Property Clock Update

Each month, independent property valuation firm Herron Todd White (HTW) publishes a residential property report that assesses the performance of Australia’s 50 largest markets. HTW’s Property Clock grades each market based on current and predicted performance to determine whether it’s rising, falling, peaking or bottoming out.

Conclusion

Overall, the data highlights a housing market that remains close to cyclical peaks after several years of strong growth, but with momentum clearly moderating. Many capitals and regional markets are still sitting at or near record highs, underpinned by substantial gains over the past five years and further uplift since the first rate cut, while a handful of markets such as Melbourne, Hobart, Canberra and parts of regional Victoria have yet to fully recover their previous peaks. Taken together, the figures point to a market that has largely absorbed higher interest rates but is now transitioning into a more uneven shown, where past growth provides a strong buffer, yet future performance is likely to depend increasingly on affordability, local economic conditions and interest rate settings rather than broad-based price acceleration.