Buying Property in Australia in 2026

The Australia's property market experiences strong growth in 2025, with national home values rising around 8.6% and setting new records, driven by low rates and high demand, though growth is expected to moderate in 2026-2027 due to affordability and potential rate impacts, with forecasts around 5-7% growth for houses and units, supported by persistent undersupply. 

Key Trends & Figures (2025 & Early 2026):

• Strong 2025: Australian home values surged by 8.6% in 2025, adding significantly to median prices.

• Capital City Performance: Adelaide and Perth led capital city growth in late 2025, with Brisbane also showing strong gains.

• Suburban Hotspots: Numerous suburbs saw double-digit growth, with some markets experiencing over 40% increases.

• Demand Drivers: Strong population growth, limited housing supply, and government initiatives (like the Deposit Scheme) supported price rises. 

  
  

Forecasts for 2026 & Beyond:

• Moderating Growth: Economists predict a shift to a more sustainable, albeit slower, pace of growth after the 2025 boom.

• 2026 Projections: Forecasts for 2026 range from 5% to 7.7% for house price increases.

• Long-Term Outlook: Continued strong underlying demand from population growth suggests ongoing, but more gradual, appreciation. 

  
  

Factors Influencing the Market:

• Interest Rates: While recent rate cuts spurred activity, potential future RBA tightening could influence momentum.

• Supply Shortages: Persistent undersupply of housing remains a key factor pushing prices up.

• Affordability: Stretched affordability is acting as a brake on the extreme growth seen in past booms. 

  
  

In summary, Australia's property market is transitioning from a rapid boom to a more sustainable growth phase, characterised by strong underlying demand but tempered by affordability constraints.