Property Market Outlook 2026: Where Will Prices Grow?

After property prices rose 8.6% nationally in 2025 - the biggest increase since 2021 - what does 2026 hold? Experts are predicting continued growth, but with significant variations between cities. Here's what you need to know.

National Outlook: 5-8% Growth Expected

Most analysts are forecasting national price growth of 5-8% in 2026, slightly slower than 2025's strong performance. Dr Shane Oliver from AMP expects growth of 5-7%, while other forecasters are slightly more bullish.

The key factors driving continued growth include:

• Housing shortage: An estimated 200,000-300,000 dwelling shortfall
• Strong population growth: Immigration remains elevated
• Limited new supply: Construction completions still catching up
• Tight rental market: Pushing renters to buy

City-by-City Forecasts

Not all markets will perform equally. Here's what experts predict for each capital city:

Sydney: Heading Towards $2 Million Median

Sydney's median house price is forecast to reach approximately $1.92 million by the end of 2026. Despite already being Australia's most expensive market, strong demand and limited supply continue to push prices higher.

For Sydney buyers, this means:

• Acting sooner rather than later if you're ready to buy
• Considering apartments or townhouses for better value
• Looking at growth corridors in the north-west and south-west
• Exploring the 5% deposit scheme to get into the market faster

A Year of Two Halves

Many analysts expect 2026 to be a year of two halves:

This suggests buyers who act in the first half of the year may see better capital growth than those who wait.

Key Trends to Watch

1. Multi-Generational Living

High prices are encouraging more families to live together. Demand is growing for homes with granny flats, second living areas, or separate bedroom suites.

2. First Home Buyer Activity

First-time buyers are experiencing "fear of missing out" and rushing to use the 5% deposit scheme before prices move further out of reach.

3. Investor Return

After a quiet period, investor activity is expected to increase in 2026, particularly in high-yield markets like Perth and Brisbane.

4. Regional Markets

Regional areas within commuting distance of capital cities are expected to continue performing well as remote work remains common.

What This Means for Buyers

If you're planning to buy in 2026:

• Get pre-approved now: Know your budget before prices move
• Consider timing: Earlier in the year may be better than later
• Look at growth areas: Not all suburbs will perform equally
• Factor in rate rises: Ensure you can handle potential increases

What This Means for Investors

For property investors:

• Consider Perth, Adelaide, Brisbane: Better yields and growth potential
• Look at rental yields: Tight rental market supports income
• Review your portfolio: Is it time to buy, sell, or refinance?