As we enter 2026, Australia’s property market remains a picture of resilience and transition. After a prolonged period of slower movements, recent data shows that dwelling values are climbing again in most capital cities and many regional centres.
But the drivers of growth are more nuanced than simply “prices rising” with affordability pressures, rental tightness, and divergent performance between markets shaping the landscape.
Here we’ll give you the big picture, and break down trends across states, so you can understand how the markets most relevant to you are performing and where they’re headed.
National Overview: Growth Back on the Agenda
Across Australia, home values rose strongly toward the end of 2025. Recent index data shows national dwelling values climbing by around 1.0% in November 2025, continuing a streak of monthly gains and contributing to annual growth of roughly 7–9% in many aggregated measures.
Home prices have now reached levels near historic highs, with the combined value of the nation’s housing stock exceeding fresh milestones. National median dwelling values have approached mid-to-high $800,000s as of late 2025, underscoring how widespread growth has come after earlier tightening and uncertainty.
Both house and unit values showed growth through the end of last year, though detached houses have generally outperformed units in more expensive cities. Residential values in smaller capitals and regional markets have been especially strong, helping lift national averages.
What’s driving this?
- Interest rate dynamics: After a period of stability and some easing through 2025, borrowing costs have become more predictable, helping hesitant buyers return to the market.
- Limited listing supply: Across many cities and regions, the number of homes for sale is still low compared with long-term averages, intensifying competition and supporting prices.
- Rental market pressures: Vacancy rates remain tight in many capitals, pushing rents higher and increasing investor interest.
- Affordability challenges: Despite rising prices, household incomes and borrowing capacity have not kept pace, making affordability the dominant restraint for many buyer segments.
Sales Volumes and Sentiment
Alongside price gains, sales activity has ticked up in most markets. While not a dramatic rebound, buyer engagement, measured through higher open-home attendance and improved auction clearance rates, shows stronger sentiment than in much of 2024.
Domain’s research has observed that rate cuts in early 2025 helped pull some sidelined buyers back into the market, giving confidence a lift.
However, sentiment is still cautious for many first-home buyers and those with stretched budgets, particularly in Sydney and Melbourne where record prices continue to outpace income growth and borrowing capacity.
Rental markets are also firm. Vacancy rates remain below long-term averages in most capitals, meaning rental growth continues to outpace inflation in places like Brisbane, Perth and Darwin, a dynamic that supports yields but further compresses affordability for tenants.
Residential Property: State-by-State Breakdown
New South Wales (Sydney and Regions)
Sydney’s housing market is showing moderate growth, with home values continuing to edge upward although at a slower pace than some smaller capitals.
Well-located suburbs remain in demand, and buyer interest in both houses and quality units is returning slowly. Still, affordability constraints are stronger here than in most other major cities, keeping some buyers on the sidelines.
Regional NSW is also showing solid performance in many centres, particularly where lifestyle appeal, affordability and infrastructure investment intersect, making areas beyond the Sydney basin attractive to buyers priced out of the capital.
Victoria (Melbourne and Regions)
Melbourne’s market has gradually returned to growth after a period of weaker performance, with consecutive months of price increases seen through late 2025. House values have tended to rebound more strongly than units, which still lag somewhat behind.
Market momentum remains steady rather than spectacular, but there’s growing confidence among buyers and investors that Melbourne’s broad economic base and population dynamics will support further gains into 2026.
Regional Victoria continues to appeal for affordability seekers, especially where commuting times and infrastructure improvements make commuter belts more accessible.
Queensland (Brisbane and Regionals)
Queensland remains one of the strongest performing states. Brisbane’s housing values have risen substantially over recent years, well above many other capitals, supported by sustained demand, interstate migration and relative affordability compared to Sydney and Melbourne.
Brisbane has broken the $1 million median price threshold in many measures, reflecting both growth and tightening inventory. Regional Queensland markets are also capitalising on lifestyle demand and infrastructure investment.
Western Australia (Perth and Beyond)
Perth’s market has been one of the most dynamic in the country. Home values surged later in 2025, with notable monthly and quarterly gains that consistently outpaced many other capitals. Buyers continue to be drawn by affordability, strong state economy performance and limited available stock. Regional WA also benefits from strong local employment conditions and a renewed flow of interstate interest.
South Australia (Adelaide)
Adelaide has posted solid growth, reaching new price thresholds for houses and maintaining steady demand. While the pace of gains has moderated from the peaks of recent years, Adelaide remains attractive for buyers seeking value and stable long-term prospects.
Tasmania
Tasmania has seen moderate growth across its key markets. While slower than the mainland capitals, home values remain well above levels seen earlier in the decade and continue to draw attention from buyers looking for lifestyle, affordability and regional spread.
Northern Territory (Darwin)
Darwin’s housing market stands out for its strong annual growth. Rental yields in Darwin are among the highest in the country, which has helped support investor interest despite the market’s smaller scale relative to the major capitals.
Australian Capital Territory (Canberra)
Canberra continues to see steady, if modest, price growth. Public-sector stability, employment diversity and limited stock have underpinned a market that moves more predictably than many bigger cities. It remains an attractive option for those who prioritise long-term stability and lifestyle over volatile performance.
Rural and Commercial Property Context
While the headlines often focus on residential values, rural and commercial property sectors are also playing key roles in the broader 2026 landscape.
Rural property markets have displayed resilience, driven by demand for lifestyle blocks, hobby farms and acreage properties, particularly in areas within commuting distance of major cities.
Agricultural land values tend to move differently from residential markets, influenced by commodity prices, export conditions, and on-farm productivity. Markets near growth corridors or with strong infrastructure linkages are attracting more attention.
Commercial property is displaying a differentiated performance by sector. Industrial and logistics properties, in particular, remain in demand as supply chain preferences continue shifting towards e-commerce and decentralised warehousing.
Office markets, especially in CBD cores, are adapting to flexible work patterns, with submarkets that provide amenity and accessibility outperforming those that are more commuter dependent.
Retail is a mixed picture: neighbourhood and convenience centres with essential services are doing relatively well, while large format and discretionary retail face ongoing challenges.
What to Expect in 2026
Looking ahead, the Australian property market is likely to continue its broad slow-and-steady ascent, but with notable variations:
Property values are expected to grow further, though likely at a more moderated pace than the peaks of late 2025.
Forecasts from multiple analysts suggest low-to-mid single-digit annual gains nationally, with some smaller capitals and regional areas potentially reaching higher figures. Buyer activity is influenced by a delicate balance of interest-rate expectations, affordability pressures and supply constraints.
Prediction models and industry commentary point to regions like regional Queensland, NSW, WA and VIC performing strongly, while some of the biggest metros like Sydney and Melbourne may grow more slowly if rates remain unchanged or if lending conditions tighten.
Rental markets are expected to remain relatively firm in many urban and regional centres, supporting investor returns even as capital growth finds its rhythm.
Sales volumes may temper slightly relative to the peaks of recent months as recurrent affordability challenges discourage some buyers, especially first-home entrants, from transacting without strong financial confidence.
Lifestyle and regionally driven demand is anticipated to remain a persistent theme, with many Australians choosing flexibility, space and quality of life as priorities alongside price.
Key Takeaways for Homeowners
- Residential values are rising again. Housing prices nationally showed solid monthly growth into late 2025, building on gains from earlier in the year and taking residential values near record highs.
- Smaller capitals and regionals are outperforming. Markets like Perth, Brisbane and Darwin are seeing faster gains than Sydney and Melbourne in recent data.
- Affordability remains top of mind. While prices rise, many buyers are feeling squeezed, especially where income growth hasn’t kept pace.
- Rural and commercial sectors are evolving. Demand for lifestyle rural properties and industrial commercial assets remains strong, even as office and discretionary retail sectors adapt.
- 2026 looks like steady growth. Forecasts point to continued value increases, but with modal differences in speed and risk across cities and regions.
Australia’s property market has shifted into a new chapter, one marked by steady gains, selective regional surges, and a broad reshaping of demand preferences. Whether you’re a homeowner monitoring value, an investor planning your next move, or a prospective buyer looking for opportunity, 2026 is shaping up to reward thoughtful, locally informed decisions.
If you’d like personalised insights for your suburb or investment strategy contact an Elders Expert in your area here.