Federal housing schemes, state reforms and persistent affordability challenges are defining Australia’s property outlook for 2026, with the Real Estate Buyers Agents Association of Australia (REBAA) forecasting stable yet divergent conditions across the nation’s capital and regional markets next year.
REBAA President Melinda Jennison said the Australian housing market had continued to be shaped by a combination of affordability pressures, higher interest rates and constrained borrowing capacity, with performance varying across capital cities and regional areas over the past year.
“While some markets have experienced softer conditions as higher rates and rising stock levels took the heat out of price growth, others, particularly those still perceived as relatively affordable, have remained resilient, underpinned by population growth, tight rental markets and limited new housing supply,” Ms Jennison said.
“Across the country, demand for well-located, quality homes and investment-grade assets have remained solid, even as many buyers adjust expectations on budget, location and dwelling type.”
Ms Jennison said lower-value market tiers and more affordable corridors in a number of cities continue to attract strong interest from first home buyers, especially since the introduction of the Federal Government’s First Home Guarantee Scheme, while some premium segments 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,” she said.
“In this environment, professional buyers’ agents have become increasingly important in helping home buyers and investors navigate competitive and complex conditions
“REBAA members are working on the ground to source opportunities – including off-market and pre-market properties – provide independent advice on pricing and risk, and guide clients through negotiations, contract conditions and due diligence so they can make informed, long-term decisions rather than reactive ones.”
NEW SOUTH WALES
REBAA New South Wales State Representative Linda Johnson said the state has moved through 2025 in a surprisingly firm upswing.
“After a soft start to the year, price growth has reaccelerated as buyers adjusted to higher mortgage costs and accepted that a sharp correction was unlikely,” Ms Johnson said.
“Across NSW, both houses and units recorded solid gains, with regional markets again edging ahead of Sydney on a percentage basis.”
Ms Johnson said in metropolitan Sydney, the story has been one of scarcity, not frenzy.
“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 townhouses 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 rather than giving them back, she said.
“Lifestyle and commutable centres in the Hunter, Illawarra, Central Coast and key inland hubs such as Dubbo and Narromine have posted new price peaks, underpinned by ongoing capital-city migration, tight rental markets and relatively higher yields,” Ms Johnson said.
“Policy and credit settings have been central in 2025. The Minns Government’s low and mid-rise housing policy, which opens up medium-density housing within 800 metres of 171 transport-rich centres, is starting to shift developer focus,” she said.
“However, industry modelling still points to a sizeable state-wide housing shortfall by the end of the decade.
“The expansion of the First Home Guarantee Scheme from 1 October has drawn more first home buyers into outer-metro Sydney and larger regional centres yet build costs and planning bottlenecks remain real challenges.”
She said that rental reforms that came into force in mid-May, including ending no-grounds evictions, lengthening notice periods and making it easier to keep pets had impacted investor activity.
“Whilst providing more tenant security, there’s landlord uncertainty, with some investors more cautious and considering selling or switching asset classes. There has been no material easing on rents or vacancies,” she said.
“New South Wales has also seen an underquoting crackdown with new proposed laws. Enforcement has already ramped up with NSW Fair Trading on an audit blitz across Sydney and regional areas, delivering ‘please explain’ notices and on the spot fines.”
Ms Johnson said that despite policy and reforms, the NSW market is still being driven by interest rates, chronic undersupply, population growth, and rental scarcity.
“The Reserve Bank’s cash rate sits at 3.60 per cent after earlier cuts, with recent upside surprises in inflation reducing the odds of further easing in the near term,” she said.
“This backdrop suggests 2026 is likely to deliver more of the same – tight rental conditions, persistent undersupply and moderate, uneven price growth rather than a boom.
“Stretched affordability and higher living costs will cap how far and how fast buyers can chase prices.
“Quality, family-suitable and investment grade stock in both metro and key regional centres, are expected to stay highly contested, while secondary assets and fringe locations will see more measured and increasingly price-sensitive demand.”
VICTORIA
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,” Mr 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.” He said that Melbourne even outpaced Sydney’s growth rate in October, which shows just how quickly momentum has shifted.
“What’s driving it? A few things lining up at once. Earlier this year, we worked through a lot of extra stock, and now demand is outstripping supply,” he said.
“Building approvals are at record lows, migration is booming, and vacancy rates are sitting at historic lows. Add in interest rate cuts and suddenly the market feels very different to this time last year.
“Melbourne is also still far more affordable than Sydney, with land packages around $700,000 compared to Sydney’s $1.15 million, so investors are circling again looking for value.”
But it’s not every part of Melbourne rising evenly, he said.
“The suburbs doing best are the inner- and middle-ring pockets where families, professionals, and long-term owner occupiers want to be,” he said.
“Houses and townhouses on good land in lifestyle-friendly locations are leading the charge. High-rise or off-the-plan apartments, on the other hand, continue to struggle thanks to oversupply and weaker demand from quality tenants.”
Mr 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.
“For buyers, now is one of those rare countercyclical windows – prices are still below previous peaks, sentiment is improving, and competition is building but not yet crazy.
“If you focus on high-quality, investment-grade homes in tightly held suburbs, the next 12 to 24 months could be very rewarding.”
QUEENSLAND
REBAA Queensland State Representative Melinda Granzien said the Sunshine State’s property market remained firmly resilient through 2025, with both Brisbane and many regional centres experiencing strong buyer activity, limited supply, and short selling timeframes 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,” Ms 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.
“There has been a significant rise in demand for townhouses and units, as buyers adjust expectations to align with current borrowing capacity.
“Affordability pressures have pushed some buyers towards more attainable dwelling types, but demand for detached homes in established suburbs remains extremely high. Buyers who are finance-ready are moving quickly, and competitive offers are common.”
Across regional Queensland, conditions remain varied but generally upbeat.
Key regional centres such as Toowoomba, Ipswich, Rockhampton, the Fraser Coast, and the Whitsundays continue to benefit from lifestyle migration and local economic stability, she said.
“Many regional markets are recording short days on market, low vacancy rates, and consistent rental demand. Investors are active but more measured than previous years, prioritising yield, property condition, and long-term rental performance,” she said.
“A defining feature of 2025 has been the persistent shortage of quality stock across both metropolitan and regional markets. Low listing volumes have been the greatest pressure point this year. Despite higher living costs, strong rental competition and limited supply continue to underpin confidence, even in the face of broader economic uncertainty.”
She said that during the initial rollout of the sellers’ disclosure statement in August, contracts were taking longer as vendors gathered the required documents and caused some delays with contract preparation.
“However, we are now seeing more sellers becoming better prepared upfront, which is improving the low of transactions. Despite the increased paperwork, the disclosure document must not replace thorough due diligence for buyers,” she said.
“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. The combination of demand, limited supply, and improving transparency provides a stable foundation for 2026.”
WESTERN AUSTRALIA
REBAA Western Australia State Representative Peter Gavalas said Perth had continued to perform strongly this year, with low stock levels and intense buyer demand placing upward pressure on prices.
“Dwelling values rose 5.4 per cent in the last quarter alone and 9.4 per cent year-to-date,” Mr Gavalas said.
“In regional Western Australia, median dwelling values increased 13.5 per cent over the past 12 months, driven by more affordable housing options and strong rental yields attracting investor interest.”
Sales volumes in Perth have remained relatively stable, sitting 3.3 per cent lower than the previous year– primarily due to reduced stock levels, he said.
“New listings have fallen 28 per cent compared to the same time last year, while total listings are down 26 per cent over the same period,” he said.
“Rental vacancy rates remain well below the long-term average, currently sitting at 2.2 per cent, which has contributed to a 5.8 per cent increase in median rents over the rolling 12-month period. Gross rental yields remain among the strongest in the country at approximately four per cent.”
This year’s interest rate cuts, coupled with the introduction of the First Home Guarantee in October, have added significant demand to the market and contributed to tightening stock levels since July, he said.
“The sub-$850,000 price point – aligned with the scheme’s cap – has experienced particularly strong growth, with properties frequently selling 10 to 12 per cent above the asking price and attracting 10 or more offers,” he said.
“We also saw more investors return to the market as confidence in Perth’s price outlook strengthened and rental yields remained robust. Investor activity is now heavily concentrated in the same price bracket as first home buyers, adding further pressure to that segment.”
Upgraders and downsizers have also been active throughout the year, he said. “Quality family homes on larger lots attracted substantial demand and multiple offers, as buyers sought to upgrade into premium suburbs – often prioritising proximity to water, school zones, and easy CBD access,” he said.
“Conversely, downsizers have been focused on securing smaller, renovated, single-level homes to simplify their living arrangements while unlocking equity from their larger family properties.
“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.”
SOUTH AUSTRALIA
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,” Mr O’Donoghue said.
“2025 has proved to have record-high property prices in virtually all suburbs, along with strong rental yields basically due to SA still having high demand in rental properties coinciding with ongoing supply constraints.
“This relates to both metropolitan Adelaide and regional areas showing resilience and growth.” He said median house prices in South Australia reached $800,000 in September 2025, continuing a streak of record highs across consecutive quarters.
“Whilst in regional South Australia we have also seen robust growth, with median dwelling values at $495,290, up 10.4 per cent year-on-year,” he said.
“Houses in regional areas averaged $507,232, while units climbed to $371,852, once again reflecting strong demand across both segments.
“The standout performer was Robe in the southeast of the state, which posted a nine per cent quarterly increase and 16.8 per cent annual growth, driven by lifestyle appeal and migration.”
Rental markets remain resilient, with gross rental yields at 4.7 per cent, well above the national average of 3.7 per cent, he said.
“House values rose 8.3 per cent annually, while unit values increased 3.4 per cent, reinforcing investor confidence in steady income returns,” he said.
Overall, South Australia’s property market in 2025 was defined by record-breaking prices, strong rental yields, and constrained supply, he said.
“Migration trends and lifestyle appeal continue to fuel demand, while easing interest rates may encourage more activity in the months ahead,” he said.
“Both metropolitan Adelaide and regional towns are benefiting, making the state one of Australia’s most resilient real estate markets.”
ACT
REBAA ACT State Representative Claire Corby said the Canberra property market has been a steady one in as the ACT began to recover from recent price dips.
“In the inner rings, established vendors have stood their ground and it’s taken time and motivation, and some creative terms at times, to bridge the gap when negotiating between buyers and sellers,” Ms Corby said.
“Days on market have increased for premium properties as sellers have held out and been unwilling to meet the market.
“In the outer-ring suburbs, homes offering newer construction and higher energy efficiency ratings have experienced strong buyer competition even before the government’s guarantee was announced.”
Ms Corby said the theme of “affordability” has echoed consistently throughout a year marked by the rising cost of living, which may account for the lift at the lower end alongside the reluctance for buyers to pay the premiums of the upper end.
“The Canberra market is at an interesting tangent – our local economy has never been in greater debt with the ACT Government’s AAA rating slipping to a mere AA, while our infrastructure spending on the light rail project ploughs on,” she 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.”
TASMANIA
REBAA Tasmania State Representative Samantha Spilsbury said the state’s property market had maintained a steady, confidence-driven rhythm throughout 2025, with activity strengthening notably in the second half of the year.
“Statewide house sales increased 11 per cent for the quarter, up 4.4 per cent year-on-year, while the median house price held firm at $610,000 – a level 1.7 per cent higher than 12 months ago,” Ms Spilsbury said.
“More importantly, sentiment has shifted – buyers are returning, competition has increased, and confidence has improved as interest rates stabilise and major infrastructure projects reach completion.”
She said a significant catalyst in recent months has been the First Home Guarantee.
“With price caps set at $600,000 for Hobart and $550,000 across the rest of Tasmania, the scheme has ignited exceptional demand in these brackets,” she said.
“Open homes are regularly attracting 30 to 40 groups, and well-priced properties are receiving up to 15 offers. This is most noticeable in Hobart’s outer-ring suburbs – Glenorchy, Claremont and Rosetta – where buyers are moving quickly to secure limited stock. These conditions are reminiscent of the competitive 2021–22 environment, albeit in a more stable, less speculative way.”
Ms Spilsbury said Launceston continues to perform as one of the state’s most balanced and resilient markets.
“A combination of strong employment, lifestyle appeal, quality schools and relative affordability has kept days-on-market low. Updated family homes in Trevallyn, Newstead and Youngtown remain tightly held and highly sought-after,” she said.
“Investor activity is gradually returning, particularly for low-maintenance properties offering solid yields.
“In the North-West, markets such as Burnie and Devonport have gained momentum with both regions offering price accessibility paired with improving local amenity and ongoing infrastructure upgrades. “Burnie has seen increased interest from mainland investors chasing yields, while Devonport’s lifestyle drawcard and new developments continue to underpin demand.”
Infrastructure has played a major role in strengthening buyer confidence, she said.
“The Bridgewater Bridge, now officially completed, has materially improved connectivity between Hobart’s northern suburbs and the CBD, supporting both liveability and long-term growth prospects,” she said.
“Continued investment into recreational precincts and regional town centres is reinforcing stability across the state.
“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.”
Supply remains the key pressure point, she said.
“Unless there is a noticeable uplift in listings, strong competition – particularly from first-home buyers – is likely to persist into the new year.”
ENDS
For more information or to organise an interview with Ms Jennison please contact:
Bricks & Mortar Media | media@bricksandmortarmedia.com.au | 0405 801 979
Contact details for REBAA State Representatives can be found here.
