Australian Property Market Forecast 2026

Two back-to-back RBA rate hikes. Perth recording 2.3% growth in a single month. Brisbane overtaking Melbourne in median dwelling value. Australia’s property market in 2026 is not moving in one direction — and understanding the divergence matters whether you’re buying your first home, upgrading, or growing an investment portfolio.

Here’s a data-grounded breakdown, drawing on the latest from PropTrack, Cotality, KPMG, Domain, and SQM Research.

The National Picture

According to the PropTrack Home Price Index for February 2026, national home prices rose 0.5% in February, taking the national median to $897,000 — up 9.1% year-on-year. The RBA cash rate now sits at 4.10% following consecutive 25 basis point hikes in February and March 2026. Domain reports no cuts are forecast over the next 12 months, and SQM Research has flagged the possibility of a further rise in May.

Forecasters are divided. KPMG projects 7.7% national house price growth for 2026. SQM Research revised its base case down sharply in March to 0–3% weighted capital city growth, citing energy shocks and rate rise risk. Domain sits in between at 6–7% for the combined capitals, largely driven by the expanded First Home Guarantee Scheme. The market is increasingly segmented — by city, price point, and property type.

City-by-City Outlook

Perth: Strongest in the Nation

Cotality data shows Perth jumped 2.3% in a single month in February, pushing the median dwelling value to $989,211. For-sale listings are 48% below their five-year average. KPMG forecasts 12.8–13% house price growth for 2026 — the strongest among all capital cities. Population growth remains the fastest in the country, and supply continues to lag demand despite rising building approvals in WA.

Brisbane: Overtaking Melbourne

Brisbane’s median dwelling value reached $1,080,538 in February — surpassing Melbourne and continuing to grow at over 1% per month. KPMG forecasts 10.9% house price growth for 2026, with a further 8.9% in 2027. For-sale listings are 31% below the five-year average. The 2032 Olympics pipeline continues to attract infrastructure investment. Lagos Financial’s Sam is based in Brisbane — see our dedicated Brisbane market guide for the full breakdown.

Adelaide: Steady and Consistent

Adelaide’s median was $922,991 in February, with monthly growth exceeding 1%. KPMG forecasts 8.2% house price growth for 2026. Adelaide has outperformed Melbourne consistently over the past three years and offers relatively attractive land tax thresholds for investors. It’s a market that often flies under the national radar while delivering consistent results.

Sydney: Flat but Structurally Supported

Sydney’s median of $1,296,039 recorded no growth in February and is down 0.1% over three months — the RBA hikes hitting Australia’s most rate-sensitive market. Fresh listings are running 9.7% above the five-year average, giving buyers more choice than they’ve had in some time.

Domain projects Sydney’s median house price reaching $1.92 million by year-end, a 7% gain. SQM Research is more cautious, flagging potential 2–6% price falls if further rate increases materialise. For Sydney buyers, price point and suburb selection matter more in 2026 than in previous years.

Melbourne: Recovering, Not Surging

Melbourne’s median of $826,132 was flat in February and down 0.4% over three months. KPMG forecasts 6.8% house price growth for 2026, with units at 7.3% — one of the stronger unit outlooks nationally. Domain projects recovery to $1.17 million by year-end. For investors, Melbourne’s below-Sydney entry prices combined with forecast recovery momentum create an interesting longer-term case, particularly in the inner-ring unit market.

Tasmania: Launceston and Hobart Surging

Hobart’s median was $728,815 in February, up more than 1% for the month. Propertyology names Launceston among locations tipped for 6%+ growth in 2026. Tasmania’s combination of lifestyle appeal, mainland migration, and tight rental vacancy is sustaining demand. Lagos Financial’s Launceston office provides local market knowledge for investors considering Tasmanian property.

What’s Driving the Divergence

Three forces explain why mid-sized capitals are outperforming Sydney and Melbourne in 2026:

Listings scarcity — Perth and Brisbane have for-sale listings 30–50% below five-year averages; Sydney and Melbourne have far less constrained supply
Rate sensitivity — the RBA’s back-to-back hikes compress borrowing capacity more severely in higher-priced markets
Policy concentration — First Home Guarantee and related schemes drive disproportionate demand at lower price points, which are more prevalent in mid-sized capitals

Practical Guidance for 2026

Whether you’re looking at your first home loan or your next investment property:

Know your serviceability ceiling — the RBA at 4.10% plus the 3% APRA buffer means assessments at 7.10%. Understand your actual borrowing capacity before inspecting
Focus on supply fundamentals, not forecasts — Perth, Brisbane, and Adelaide have structurally constrained supply; this is the floor under prices even as demand softens
Lower price points are outperforming — first home buyers, investors, and policy incentives are all concentrated at the affordable end in every city
Get pre-approved first — in fast-moving markets like Perth and Brisbane, having finance ready before you inspect is essential

For those with existing loans, the rate environment makes it worth reviewing your current structure. See our refinancing guide for context.

Frequently Asked Questions

Is now a good time to buy property in Australia?

It depends on your market, budget, and circumstances. Perth, Brisbane, and Adelaide are showing strong demand and constrained supply. Sydney and Melbourne carry more uncertainty. The answer is never universal — it’s specific to your situation, your target suburb, and whether you can comfortably service a loan at current rates.

Will the RBA raise rates again in 2026?

As of March 2026, money markets are pricing in the possibility of a May hike, though it’s not certain. SQM Research’s revised forecast explicitly cites further rate rise risk as the key downside scenario for property prices. Stress-test your repayments at a further 0.5% increase before committing.

Has Brisbane really overtaken Melbourne?

On median dwelling value, yes. Brisbane’s $1,080,538 median surpassed Melbourne’s $826,132 as of February 2026 — a reversal that would have seemed unlikely five years ago. It reflects Brisbane’s five-year compound growth of approximately 90%, compared to Melbourne’s modest performance.

How are regional markets performing?

PropTrack reports regional prices rose 0.6% in February 2026 and 10.5% year-on-year — outperforming the combined capitals. Regional Tasmania, coastal Queensland, and South Australian towns are among the strongest performers for investors seeking yield and growth outside the majors.

Understand Your Position in the 2026 Market

The right move in 2026 depends on your market, your finances, and your goals. Lagos Financial works with buyers and investors nationally — offices in Sydney and Launceston, with Sam in Brisbane. Book a complimentary assessment to map out your next step.

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