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According to a forecast by the Real Estate Buyers Agents Association of Australia (REBAA), the market in 2026 will be “stable yet divergent”, predominantly influenced by federal housing initiatives, state-level planning, rental reforms, and cost-of-living pressures.
REBAA’s president Melinda Jennison said that the outlook remains broadly steady, but outcomes are increasingly fragmented between capital cities and regional markets, as well as across price points.
While some markets have softened as higher rates and rising stock levels tempered price growth, others, particularly those still viewed as relatively affordable, have remained resilient. Population growth, tight rental conditions, and limited new housing supply have continued to underpin demand in these areas.
“Across the country, demand for well-located, quality homes and investment-grade assets has remained solid, even as many buyers adjust expectations on budget, location and dwelling type,” Jennison said.
Lower-value market segments and more affordable corridors in several cities have continued to attract strong interest from first home buyers, supported by the federal government’s First Home Guarantee Scheme, while some premium markets have normalised after the rapid gains of previous years.
“Overall, the national picture is one of divergent but generally stable market performance, with local economic conditions, migration trends and policy settings all playing a role,” Jennison added.
Read the state-by-state overview below.
NSW: Uneven market conditions
The NSW housing market has moved through 2025 in a firmer position than expected, with price growth reaccelerating after a soft start to the year, as buyers adjusted to higher mortgage costs and accepted that a sharp correction was unlikely.
Both houses and units have recorded solid gains, with regional markets again outperforming Sydney on a percentage basis.
REBAA NSW representative Linda Johnson said in metropolitan Sydney, the story has been one of scarcity, not frenzy. Despite policy and reforms, the NSW market is still being driven by interest rates, chronic undersupply, population growth, and rental scarcity.
“Listings remain well below historic averages, and vacancies are near record lows, pushing both prices and rents higher,” she said.
“Demand has broadened from inner-city blue-chip suburbs into more affordable middle-ring areas and transport corridors, with attached dwellings and town houses attracting strong interest as buyers trade land size for a lower price point.
“Investor activity has lifted cautiously on the back of stronger yields, but highly leveraged buyers are still constrained by serviceability buffers.”
Regional NSW has consolidated its pandemic-era gains. Lifestyle and commutable centres, including the Hunter, Illawarra, Central Coast, and key inland hubs such as Dubbo and Narromine, have reached new price peaks, supported by capital-city migration, tight rental markets, and comparatively higher yields.
Looking forward, Johnson added: “2026 is likely to deliver more of the same – tight rental conditions, persistent undersupply and moderate, uneven price growth rather than a boom.”
Qld: Resilient demand
Queensland state representative Melinda Granzien said the Sunshine State’s property market has remained firmly resilient through 2025, with both Brisbane and many regional centres experiencing strong buyer activity, limited supply, and short selling time frames as the year draws to a close.
“Brisbane continues to stand out as one of the most competitive capital city markets, driven by low stock levels, population growth, and increased buyer readiness,” Granzien said.
“Well-presented homes are attracting immediate interest, and many are selling within the first one to two weeks. Days on market have tightened noticeably since mid-year, and momentum remains strong across the middle and outer rings.”
Regional markets, such as Toowoomba, Ipswich, Rockhampton, the Fraser Coast, and the Whitsundays, have continued to benefit from lifestyle migration and local economic stability. Low vacancy rates and consistent rental demand are supporting investor activity, which remains measured and focused on yield and property quality.
Granzien added: “Looking ahead, Queensland is entering 2026 with solid fundamentals. Population growth is expected to remain strong, rental supply will stay tight, and major infrastructure projects are progressing across the state.
“While affordability will continue to influence decisions, Queensland is well positioned for steady, sustainable conditions in the year ahead.”
Victoria: Momentum returns
Victoria’s property market has regained momentum through the second half of 2025 following a flat 2024. Prices have risen steadily, with strong auction activity and clearance rates reflecting improved buyer confidence. Melbourne outpaced Sydney’s growth rate in October, highlighting the shift in market momentum.
REBAA Victoria state representative Matt Scafidi said Melbourne’s property market has finally found its groove again.
“After a pretty flat 2024, prices have been climbing steadily through the second half of 2025, with October alone up 0.9 per cent and the September quarter rising one per cent overall,” Scafidi said.
“Auctions have roared back to life, too. October delivered the biggest auction weekend we’ve seen in four years, and a solid 72 per cent clearance rate shows buyers are well and truly back in the game.”
Price growth has been uneven. Inner and middle-ring suburbs are performing strongest, particularly houses and town houses in lifestyle-oriented locations. High-rise and off-the-plan apartments continue to underperform due to oversupply and weaker tenant demand.
Scafidi said major banks now expect Melbourne to be one of Australia’s strongest performers in 2026, with price growth of around 10 per cent over the next year.
“Analysts are tipping Melbourne to hit new record highs by the end of the first quarter of 2026, which says a lot about where the market is heading,” he said.
“If you focus on high-quality, investment-grade homes in tightly held suburbs, the next 12 to 24 months could be very rewarding.”
WA: Price growth continues
Western Australia’s property market has continued to perform strongly in 2025, with Perth experiencing low stock levels and intense buyer demand. Dwelling values recorded strong quarterly and year-to-date growth, while regional Western Australia saw even stronger annual gains driven by affordability and high rental yields.
Interest rate cuts and the introduction of the First Home Guarantee in October added significant demand, particularly in the sub-$850,000 price bracket. Investor activity increased, competing directly with first home buyers in this segment. Upgraders and downsizers were also active, with strong demand for quality family homes and smaller, renovated single-level properties.
REBAA Western Australia state representative Peter Gavalas said: “The expectation is that prices will remain strong through the remainder of the year, with ongoing upward pressure forecast into 2026. Persistently low supply, combined with growing pent-up demand, is likely to keep market conditions tight and price growth elevated.”
SA: Record prices and strong yields
REBAA South Australia state representative Matt O’Donoghue said this year had been characterised by strong market conditions and record prices.
“The South Australia market kicked off this year as it has every year post COVID – with all suburbs in Adelaide showing huge demand, be it $500,000 units or multimillion-dollar dwellings,” O’Donoghue said.
Median house prices reached new highs in September 2025, while regional dwelling values recorded robust annual growth. Both houses and units performed strongly, with lifestyle-driven regional locations such as Robe posting standout results.
Tasmania: First home demand keeps competition elevated
Tasmania’s property market has maintained a steady rhythm through 2025, with activity strengthening in the second half of the year. Statewide house sales increased, while median prices held firm with modest annual growth. Buyer confidence has improved as interest rates stabilised and infrastructure projects were completed.
The First Home Guarantee Scheme was a key driver of demand, particularly in Hobart and regional price-capped markets.
REBAA Tasmania state representative Samantha Spilsbury added: “Looking ahead to 2026, we expect Tasmania’s market to continue operating under similar conditions – competitive buyer behaviour in affordable brackets, stable pricing, rising investor participation and consistent demand in well-located regional hubs.”
ACT: Recovering from price dips
REBAA ACT state representative Claire Corby said the Canberra property market has been a steady one, as the ACT began to recover from recent price dips.
Broader economic considerations, including government debt levels and ongoing infrastructure spending, formed part of the market backdrop. Discussions around urban infill and potential zoning changes gained momentum, with quality and value remaining central to buyer decision making.
Looking to the future, Corby said: “The conversation around urban infill is gaining momentum, and 2026 may see some broadsheet changes to our lowest level of residential zoning.
“As Canberra evolves and gains maturity and depth to its housing stock, quality and value will be of prime concern to savvy property buyers.”
[Related: Australia's property hotspots for 2026 unveiled]