Australian Property Markets 2026: A Tale of Two Speeds

Australia's capital city property markets are telling two very different stories in 2026 — one of cooling in the south-east, and one of continued momentum across the nation's mid-sized cities.

The national Home Value Index was flat in May, with Sydney and Melbourne leading the downturn, falling 0.9% and 0.8% respectively. The median house price across Australia's combined capital cities now sits at $1,176,185.

Sydney and Melbourne Hit the Brakes

ANZ Research expects the sharpest slowdown in prices in Sydney and Melbourne, with small falls in housing prices forecast for 2026. Properties in the top quartile of both markets have declined for five consecutive months. The softening has been attributed to both cities being more sensitive to interest rate movements than their northern and western counterparts.

That said, longer-term forecasts remain cautiously optimistic. Domain's research suggests Melbourne is expected to bounce back, with 6% capital growth on the horizon as years of underperformance have left it relatively undervalued compared to markets like Brisbane, Adelaide and Perth.

Brisbane Builds on Olympic Momentum

Brisbane continues to be one of the country's most watched markets. Price growth in Brisbane has remained steady, supported by ongoing interstate migration, major infrastructure investment and relative affordability compared to Sydney and Melbourne. Brisbane's median house price has pushed decisively above the $1 million mark, reinforcing its status as one of the country's most resilient growth markets. With the 2032 Olympics on the horizon, investor interest shows little sign of abating.

Perth Leads the Nation

Perth remains the standout performer of the cycle. KPMG forecasts Perth house prices will soar by almost 13% over the next 12 months — the highest of any capital city — driven by entry-level competition, the expanded First Home Buyer Deposit Scheme and persistently tight stock levels. By the end of 2025, Perth had not only erased years of underperformance from the 2010s but had joined the ranks of Australia's more expensive capitals, drawing strong interest from both owner-occupiers and investors.

Adelaide Holds Firm

Adelaide's median dwelling value now sits at $950,703, with houses posting a median value of $1,013,138 and annual growth of 12.2%. While momentum is beginning to ease, the city continues to attract buyers priced out of the larger eastern capitals.

The Rental Crisis Deepens

Across all capitals, renters are doing it tough. There is no end in sight for the rental crisis, with increased rental demand at a time of very low vacancy rates set to keep rents rising. CBRE forecasts capital city vacancy rates will fall further to 1.1% by 2030, and median apartment rents are likely to grow by 24% between 2025 and 2030.

The Outlook

The 2026 outlook points to continued price growth across most capital cities, underpinned by limited supply, structural demand and demographic trends — though worsening housing affordability remains a central challenge, with building approvals continuing to fall short of the levels needed to meet future demand. For buyers, sellers and investors alike, local knowledge and timing have never mattered more.

Thinking of Selling? Make Sure You Get the Best Deal

With property values at or near record highs across most capitals, now could be an ideal time to sell — but choosing the right agent can be the difference between a good result and a great one. Before you sign anything, visit agentselect.com.au to compare local agents, their track records, fees and marketing strategies. AgentSelect helps vendors take the guesswork out of one of the biggest financial decisions of their lives, ensuring you negotiate from a position of strength and get the best possible deal from your real estate agent.