How high are property prices predicted to go in 2026?
Marc Adam • January 28, 2026
Do you know your borrowing power?
After a lengthy run of rising prices in 2025, some pundits are tipping property prices could keep climbing in 2026. Today we’ll take a sneak peek inside the experts’ crystal ball – and what it could mean for your home buying plans.
2025 was a great year for home owners, though a little more challenging for buyers, with property prices climbing 8.6% nationally.
And it seems there could be plenty of steam left in the market to push prices higher in 2026 – and again in 2027.
A new report by KPMG suggests house prices across Australia could climb another 7.7% this year alone.
Of course, a lot can happen to impact property prices over the next 12 months.
So, how might prices perform in your patch?
Below is a rundown of KPMG’s forecasts for property price growth across each of the major capitals.
Sydney: the median house price could approach $2 million
Sydney house prices are being predicted to rise 5.8% in 2026, with further growth of 5.7% in 2027.
Apartment prices are forecast to increase 5.3% this year, backed up by a 4.0% rise next year.
With Sydney’s median house price currently sitting at $1.62 million, if KPMG’s forecast proves correct, the median value could top $1.81 million by the end of 2026.
Brisbane: the big gains may not be over yet
Last year saw Brisbane home values rise 14.6% – some of the biggest gains nationally, second only to Perth.
KPMG believes there’s plenty of fuel left in the tank, with house prices expected to rise 10.9% in 2026, and 8.9% in 2027.
Meanwhile, the price of Brisbane apartments is forecast to rise 7.8% for 2026, followed by growth of 4.9% in 2027.
Melbourne: price growth expected to outpace 2025
With a median residential property value of $854,000, Melbourne is now one of Australia’s more affordable capital cities.
However, prices look set to climb, with forecast house price growth of 6.8% in 2026, and then rising another 7.3% in 2027.
The next 12 months is expected to see apartment values rise 7.3%, with further gains of 5.5% forecast for 2027.
Canberra: moderate prices growth expected
Property prices in the nation’s capital rose just 4.2% in 2025, and moderate growth is expected to continue this year.
KPMG is tipping house prices to rise 4.7% in 2026, followed by growth of 3.3% next year.
Canberra apartments are expected to increase in value by 4.9% over the next 12 months, and then climb 3.6% in 2027.
Hobart: softer growth tipped for 2026
After rising 7.8% over the past 12 months, property prices in Hobart could be poised for softer growth in 2026.
House prices are expected to increase by 5.4% this year, while Hobart unit values are tipped to rise 5.1%.
2027 may see price growth continue, with house and apartment values expected to rise 4.1% and 4.0% respectively.
Adelaide: the run of price growth may continue
Strong price growth in recent years has taken Adelaide’s median home price to $908,000.
This year, KPMG is expecting the run of growth to continue, with house prices forecast to rise by 8.2%, with a further increase of 3.3% in 2027.
Unit prices are tipped to climb 6.6% this year, with growth of 3.8% in 2027.
Perth: another year of big gains
Perth’s property market was a standout in 2025, notching up price growth of 17.2%.
According to KPMG, the WA capital is set to see double-digit price growth again in 2026, with house prices expected to rise 12.8%, and apartment values forecast to increase by 11.6%.
Price growth may be more modest in 2027, with house and apartment prices expected to rise 5.1% and 3.9% respectively.
Darwin: double-digit growth may lie ahead
As Australia’s most affordable capital, with a median home price of $578,000, Darwin prices look set to rise over the next two years.
House prices could increase by a hefty 10.5% in 2026, while apartment prices could see even bigger gains of 13.4%.
2027 should see slightly softer price growth across both houses (up 6.8%) and units (9.3%).
What’s likely to drive prices higher?
KPMG is not alone in expecting property prices to climb this year.
Research group Cotality doesn’t offer price predictions, but it is expecting “modest” price growth through 2026.
The common assumption underpinning these predictions is that two key forces are likely to push prices higher – tight supply of new homes coupled with strong buyer demand.
Although housing construction is increasing, it is unlikely to keep pace with the estimated need for 240,000 new homes needed annually.
Buyer demand has been heavily influenced by three rate cuts in 2025, and the expansion of the first home buyer 5% Deposit Scheme in late 2025.
The upshot is an 18% rise in demand for home loans in December 2025 compared to the previous December.
Time to review your buying plans?
Of course, forecasts are just that – predictions – and plenty could change over the year ahead.
Even so, if you’re holding off buying in the hope of prices softening, you could be left disappointed, and possibly even out of pocket.
Now is a great time to talk to us to find out if you’re home loan ready. We’ll help you work out your borrowing capacity, so you can start working to a house-hunting budget.
Disclaimer:
The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Let’s see what the experts are predicting
Keen to try and lower your interest rate?
Here’s what the federal government has planned ahead
How are you going with your mortgage?
Having loan pre-approval can be a smart move for home buyers. But the recent Reserve Bank cash rate hikes could leave your pre-approval in need of an update. There’s a lot to love about home loan pre-approval. It shows how much a bank will let you borrow for a home – that’s your ‘borrowing power’. Pre-approval also indicates you’re a serious buyer, providing extra bargaining clout in price negotiations. And while pre-approval typically only lasts for three to six months, that can be sufficient time for many buyers to find their ideal home. But there’s a catch. Pre-approval is not a guarantee. Rather, it is a guide of what you can borrow based on circumstances at the time pre-approval was issued. And the two rate cash rate hikes the Reserve Bank of Australia has implemented this year may have chipped away at your borrowing power. That can make it worth reviewing your mortgage pre-approval. Here’s what to weigh up. Your borrowing power may have altered Your borrowing power, also known as ‘borrowing capacity’, is a key factor when it comes to buying a home. It’s the amount a bank is willing to lend for a home loan, and it’s based chiefly on your income and living expenses. However, interest rates also play a role. A rise in interest rates will mean higher repayments, and this has the potential to reduce your borrowing power. As an example, Canstar says a solo home buyer on the average full-time wage ($106,950) will be able to borrow around $12,000 less as a result of the March 2026 rate rise. Add in the 0.25% February rate hike, and that same home buyer could be looking at a $25,000 cut to their borrowing power. A couple on the a verage wage may have seen their combined borrowing power drop by $49,000 since February. That’s why it’s so important to call us to understand your true borrowing power as it currently stands. Yes, there are online calculators available. But these may not consider every aspect of your personal situation. The risk of outdated pre-approval Taking a ‘she’ll be right’ approach to your loan pre-approval could work against you. You may find, for example, that after negotiating a great price on a place you’re keen to buy, you struggle to get the home loan you need. Worst case scenario: you risk being the winning bidder at auction but failing to get finance to complete the purchase – a situation that could mean losing your deposit. Here too, a call to us can confirm if you are good to go for a home loan before you start putting money on the table for a property purchase. How to boost your borrowing power The good news is that there are steps you can take to potentially boost your borrowing power – no matter what interest rates are doing. Here are a few ideas to get started. Review household expenses – even a small change in non-essential spending can make a difference. Lower the limit on your credit card – lenders often base your borrowing power on the assumption your credit card is maxed out. Think about asking your card issuer to trim your credit limit. Or close it altogether. Clear other debts – a lingering car loan, the remains of student debt, and even an ongoing buy now, pay later balance can impact your borrowing power. Knuckling down to clear the slate could see you rewarded with increased borrowing capacity. Know that rate matters – the rate you pay isn’t the sole decider of whether a loan is a good match for your needs. But the lower the rate, the more you may be able to borrow. Talk to us for up-to-date loan pre-approval Successful home buying doesn’t have to mean borrowing as much as you can. However, it makes sense to start the ball rolling with a clear idea of your current borrowing power. Talk to us to know if your loan pre-approval is out of date, or to organise new pre-approval on a loan that’s well-matched to your needs. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Rate hikes and soaring fuel prices aren’t dampening home buyer enthusiasm, with a strong majority of Aussies still believing the time to buy is now. We look at why home-buying sentiment remains so high. Petrol prices have been stealing the headlines lately. But behind the scenes, Aussie homes have been notching up fresh gains. Over the past year, home values rose 9.9% nationally – the fastest 12-month growth since June 2022. And despite the current fuel crisis and two rate hikes in 2026, plenty of buyers are expecting values to climb higher. A recent Westpac-Melbourne Institute survey found “a clear majority of consumers still expect (home) prices to rise” over the next year. Only around one in ten think values will fall. These expectations of price growth could be behind Westpac’s finding that 83% of Australians think now is the time to buy. The right time to buy a home Buying a home is something most of us only do a few times in our life. It’s a very personal decision and a big commitment, so the ‘right’ time for you to buy is when you feel ready. That’s why we encourage you to speak with us, so you can feel confident you are financially ready to become a home owner. However, if you are holding out in the hope that prices will fall, you could be left disappointed, and potentially end up paying more in the future. Home values nationally forecast to climb 2.8% this year Yes, higher interest rates are likely to impact the property market. ANZ, for example, expects price growth to slow. But slower growth does not mean a price slump. ANZ’s forecasts suggest capital city home prices will rise 2.8% in 2026, followed by 2.1% growth in 2027. But big differences are anticipated across each capital – from dramatic price growth to modest softening, depending on location. As a guide, prices are expected to rise a whopping 12.3% in Perth this year, 9.7% in Brisbane, and 8.0% in Darwin. Values are also expected to track higher in Adelaide (up 5.75%), Hobart (3.7%) and Canberra (1.6%). Sydney and Melbourne may see prices soften by -0.7% and -1.7%, respectively, this year. But that’s far from a significant drop, and both cities are forecast to see prices rise by at least 2.6% in 2027. What’s driving values higher? The reason property prices could defy higher interest rates is simple: demand outweighs supply. The number of homes listed for sale is super-tight right now. New listings across most state capitals are lower than a year ago. And while more new homes are being built, construction levels simply aren’t keeping pace with population growth, NAB says. Buyers are seizing opportunities A shortage of homes for sale isn’t deterring buyers. Cotality estimates close to 560,000 homes have been sold so far in 2026. That’s almost 6% higher than the 5-year average. Moreover, NAB reports that home loan lending “rose sharply” in the second half of 2025, with home buyers, rather than investors, being the driving force in the mortgage market in the final quarter of the year. It goes to show that rate hikes and uncertainty in the Middle East are no match for home buyer enthusiasm. According to realestate.com.au, some first home buyers and upgraders see slower price growth as a window of opportunity, with auction demand still “hot” in parts of the market that are popular with first home buyers. Call us to know if it’s your time to buy No one knows for sure how home prices will move in the future. But it’s fair to say plenty of home buyers look back on the price they originally paid for their home, and breathe a sigh of relief that they purchased when they did. That’s because over the long term, home prices generally rise, rather than fall. Talk to us about a home loan that matches your needs if you believe now is your time to buy. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Is the grass really greener on the other side? Maybe. Australia has seen a surge of investor activity in recent years, with investment loans reaching record highs. But as home prices rise, plenty of investors are looking beyond their own backyard and making interstate purchases. Australian homes have delivered plenty of pluses for investors in recent years. Vacancy rates are low and rents are rising across much of the country. Strong price growth has seen more than 93% of recent investor sales make a profit – the highest rate in a decade. Not surprisingly, that’s seen a rush of investors keen to buy a rental place, which has pushed new investment loans to record highs. But there’s a twist. As many as one-in-five investors nationally are casting their gaze beyond their local neighbourhood and buying interstate, according to PropTrack’s latest Investor Report. In some parts of the country – including the ACT, Tasmania and the top end – 40% or more of investors are buying interstate. Is it a good idea? Here’s what to weigh up. The ‘freedom’ of buying as an investor When it comes to deciding where, and which type of property they’d like to buy, investors can enjoy plenty of freedom. An investment property doesn’t need to be close to your work, family or friends. So in many ways, you’re free to buy where you choose. And investing interstate can bring the advantage of diversity. You’re not exposed to the fortunes of just one property market. Of course, it always makes sense to invest in an area with capital growth potential, healthy rents and plenty of tenant demand. But your local market may tick each of these boxes. There is another factor that may see investors head interstate – and that’s affordability. Investing interstate may be more affordable Home values differ widely across Australia, and this can be a key driver behind the decision to invest interstate. An investor who lives in Sydney, for example, where the median home price is over $1.295 million, may not be able to afford a locally-based rental property. But their budget may extend to a more affordable market such as Hobart ($737,742), Melbourne ($828,249) or Adelaide ($937,021). Or the same investor may decide to buy in a regional area (national median $758,788). The point is that buying interstate can simply be more affordable – and potentially healthy returns. What to be aware of when investing interstate Investing interstate can be a straightforward process though there are potential pitfalls to be aware of. First, you may not have the same home-town knowledge of the area you’re buying in. That makes plenty of research essential. In addition, checking out homes listed for sale won’t be as easy as jumping in the car and popping out for a quick inspection. The solution to both challenges can be using a buyer’s agent. This is a licensed professional, who can share their local market knowledge, track down properties that suit your goals and budget, and help with price negotiations. A buyer’s agent will come at a cost though. You may be asked to pay a percentage of the property’s sale price or a flat fee. It’s an added upfront cost, though when you’re investing in an unfamiliar area, hiring a buyer’s agent could be money well spent. Bear in mind, as an interstate investor, you’re likely going to need a property manager to handle the day-to-day renting of your property. This will also involve an additional cost, so be sure to do the sums to see how this could impact rent returns. Applying for an investment loan for your interstate property If you’re planning to invest interstate, the good news is that you aren’t restricted to lenders based in other states. We can help you find an investment home loan that’s a great match for your needs no matter where the property is located. It’s a good idea to talk to us at an early stage. The process of applying for an investment loan works in much the same way as an owner-occupied loan. However, some lenders take potential rental income into account when deciding how much you can borrow. Others don’t. The difference may seem minor but it can shape your buying budget. Talk to us about your interstate investment Call us about your plans to buy an interstate rental property. We can explain your loan options, compare lenders, and explore different loan structures that can help you achieve your goals. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.