Authored by the expert who managed and guided the team behind the Australia Property Pack
Everything you need to know before buying real estate is included in our Australia Property Pack
Australia's property market is entering 2026 with solid momentum from a strong 2025, though the pace of growth is now shifting toward more affordable cities and suburbs.
In this article, we break down the current housing prices in Australia, explore which areas and property types are rising fastest, and share expert forecasts for the months and years ahead.
We constantly update this blog post to reflect the most recent market conditions and data releases.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Australia.
Insights
- The gap between Australia's median dwelling price (A$895,000) and average price (A$1,045,000) shows how a small share of multi-million dollar homes pulls the national average up by about 17%.
- Perth and Adelaide recorded the strongest monthly growth in December 2025 at 1.9% each, while Sydney and Melbourne both dipped 0.1%, signaling a clear two-speed market.
- Lower-priced suburbs are outperforming premium areas because buyers are "trading down" when affordability bites, with Cotality reporting lower quartile values growing faster than upper quartile.
- Australia needs about 240,000 new homes annually to house population growth, but only 171,667 were completed in the year to March 2024, creating an estimated shortfall of 200,000 to 300,000 dwellings.
- The RBA cash rate sits at 3.60% as of the first half of 2026, and major banks expect it to hold steady for most of the year, making local supply and demand the main price drivers.
- National vacancy rates remain near record lows, with CBRE forecasting capital city vacancy rates could fall further to 1.1% by 2030, supporting strong rental demand and investor interest.
- Western Sydney International Airport opening in late 2026 is expected to create 28,000 jobs by 2031 and drive property demand in surrounding suburbs like Badgerys Creek and St Marys.
- Major bank forecasts for 2026 cluster between 4% and 6% national growth, with CBA at 4%, NAB at 6%, ANZ at 5.8%, and Westpac at 6%.
- Brisbane's median house price has pushed above A$1 million, while Perth's median dwelling value reached A$940,635 after 15.9% annual growth in 2025.
What are the current property price trends in Australia as of 2026?
What is the average house price in Australia as of 2026?
As of early 2026, the average dwelling price in Australia is approximately A$1,045,000 (about US$690,000 or €627,000), though the more representative median price sits around A$895,000 (about US$591,000 or €537,000) because a small number of expensive homes skew the average upward.
When you look at price per square meter, the national average for Australian properties works out to roughly A$6,400 per square meter (about US$4,200 or €3,800 per sqm), though this varies dramatically between a premium Sydney apartment and a regional house.
For most buyers in Australia, the realistic price range covering about 80% of property purchases falls between A$550,000 and A$1,500,000 (roughly US$360,000 to US$990,000 or €330,000 to €900,000), with detached houses typically sitting higher and units at the more affordable end.
How much have property prices increased in Australia over the past 12 months?
Over the 12 months to January 2026, Australian property prices increased by approximately 7.5% to 8.6% nationally, depending on which index you follow, with Cotality reporting 8.6% for calendar 2025 and PropTrack showing 7.5% year-on-year growth.
This growth was not uniform across property types and locations, with Perth houses rising 15.7%, Perth units jumping 17.5%, Adelaide gaining 8.8%, Brisbane up solidly, while Sydney and Melbourne saw more modest gains of around 4% to 5%.
The single most significant factor driving this price movement in Australia over the past 12 months was the persistent housing supply shortage, with new dwelling completions falling well short of the 240,000 homes needed annually to meet demand from population growth.
Which neighborhoods have the fastest rising property prices in Australia as of 2026?
As of early 2026, the top three suburbs with the fastest rising property prices in Australia include Kalbarri in Western Australia (regional coastal town with standout house gains), Chidlow in Perth's hills (leading capital-city performer for houses), and Buccan in Queensland's Logan-Gold Coast hinterland (strong house price growth in an affordable growth corridor).
These top-performing suburbs recorded approximate annual price growth of 25% to 40% for Kalbarri, around 20% to 25% for Chidlow, and 18% to 22% for Buccan, significantly outpacing the national average.
The main demand driver explaining why these Australian neighborhoods are experiencing the fastest price growth is relative affordability, as buyers priced out of expensive inner-city areas seek value in outer-ring suburbs and regional towns where they can still qualify for finance.
By the way, you will find much more detailed price ranges across neighborhoods in our property pack covering the real estate market in Australia.
We have made this infographic to give you a quick and clear snapshot of the property market in Australia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which property types are increasing faster in value in Australia as of 2026?
As of early 2026, the ranking of property types by value appreciation in Australia places units and apartments at the top in many markets (especially Perth where units rose 17.5%), followed by detached houses in affordable cities like Perth and Adelaide, then townhouses and terraces as the "middle ground" option for buyers seeking more space than a unit.
The top-performing property type, units in Perth, recorded approximately 17.5% annual appreciation, outpacing even the strong 15.7% growth in Perth houses.
The main reason units are outperforming in several Australian markets is the affordability squeeze, as buyers who cannot afford detached houses shift toward apartments and townhouses, creating stronger demand at lower price points.
Finally, if you're interested in a specific property type, you will find our latest analyses here:
What is driving property prices up or down in Australia as of 2026?
As of early 2026, the top three factors driving property prices in Australia are the persistent housing supply shortage (new builds falling 70,000+ homes short of annual demand), strong population growth from migration (adding over 400,000 people annually), and tight rental markets keeping vacancy rates near record lows.
The single factor with the strongest upward pressure on Australian property prices is the supply-demand imbalance, with an estimated shortfall of 200,000 to 300,000 dwellings accumulated over recent years and construction unable to catch up.
If you want to understand these factors at a deeper level, you can read our latest property market analysis about Australia here.
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What is the property price forecast for Australia in 2026?
How much are property prices expected to increase in Australia in 2026?
As of early 2026, property prices in Australia are expected to increase by approximately 5% nationally over the full year, representing a slowdown from the 7.5% to 8.6% growth seen in 2025.
The range of forecasts from major Australian banks clusters between 4% and 6%, with CBA at 4%, NAB at 6%, ANZ at 5.8%, and Westpac at 6%, reflecting a consensus view of moderate but positive growth.
The main assumption underlying most price increase forecasts for Australia is that interest rates will remain stable through 2026 (no further cuts, no hikes), allowing buyers to adjust to current borrowing costs while supply shortages continue to support prices.
We go deeper and try to understand how solid are these forecasts in our pack covering the property market in Australia.
Which neighborhoods will see the highest price growth in Australia in 2026?
As of early 2026, the neighborhoods expected to see the highest price growth in Australia include Perth outer-ring suburbs like Ellenbrook and Baldivis, Southeast Queensland growth corridors like Ripley and Griffin, and Adelaide's northern suburbs like Munno Para West.
These top neighborhoods in Australia are projected to achieve price growth of 8% to 12% in 2026, outperforming the national average as buyers continue seeking affordable alternatives to premium inner-city areas.
The primary catalyst driving expected growth in these Australian neighborhoods is the combination of relative affordability, strong infrastructure investment, and population growth flowing into accessible outer-ring suburbs.
One emerging neighborhood in Australia that could surprise with higher-than-expected growth is Petrie in Brisbane's northern suburbs, benefiting from the University of the Sunshine Coast campus development and improved rail connectivity.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Australia.
What property types will appreciate the most in Australia in 2026?
As of early 2026, the property type expected to appreciate the most in Australia is well-located townhouses and terraces, as they offer a middle-ground between unaffordable detached houses and smaller apartments.
Townhouses and quality units in supply-constrained areas are projected to achieve appreciation of 6% to 9% in Australia in 2026, slightly above the national dwelling average.
The main demand trend driving appreciation for townhouses in Australia is the affordability squeeze pushing buyers toward "compromise" property types that offer more space than apartments but lower prices than detached houses.
The property type expected to underperform in Australia in 2026 is premium detached houses in expensive inner-city suburbs of Sydney and Melbourne, where affordability constraints and rate sensitivity limit buyer capacity.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
How will interest rates affect property prices in Australia in 2026?
As of early 2026, interest rates are expected to have a stabilizing rather than stimulating effect on Australian property prices, as the RBA cash rate holds steady at 3.60% with most forecasters expecting no further cuts this year.
The current RBA cash rate of 3.60% translates to variable mortgage rates around 6.0% to 6.5% for most borrowers, and major banks expect rates to remain at this level through 2026 unless inflation surprises to the upside.
A 1% change in interest rates typically affects Australian property prices by shifting borrowing capacity by roughly A$80,000 to A$100,000 for an average income household, which can translate to 5% to 8% price movement over 12 to 18 months as buyers adjust their budgets.
You can also read our latest update about mortgage and interest rates in Australia.
What are the biggest risks for property prices in Australia in 2026?
As of early 2026, the three biggest risks for property prices in Australia are a surprise rate hike if inflation proves sticky (reducing borrowing capacity), tighter macroprudential lending rules from APRA (limiting high debt-to-income loans), and a significant increase in listings that could soften seller-friendly conditions.
The single risk with the highest probability of materializing in Australia is APRA implementing stricter lending controls on high debt-to-income loans, as the regulator has already flagged this as a concern and banks are preparing for potential caps.
We actually cover all these risks and their likelihoods in our pack about the real estate market in Australia.
Is it a good time to buy a rental property in Australia in 2026?
As of early 2026, the overall assessment for buying a rental property in Australia is cautiously positive, as extremely tight vacancy rates and strong rent growth support investor yields, though high mortgage rates mean cash flow can be tight in the early years.
The strongest argument in favor of buying a rental property now in Australia is that vacancy rates remain near record lows (with CBRE forecasting capital city vacancies could fall to 1.1% by 2030), supporting rent levels and limiting downside risk.
The strongest argument for waiting before buying a rental property in Australia is the possibility that APRA tightening lending rules could reduce competition and create better buying opportunities later in 2026 or 2027.
If you want to know our latest analysis (results may differ from what you just read), you can read our assessment on whether now is a good time to buy a property in Australia.
You'll also find a dedicated document about this specific question in our pack about real estate in Australia.
Buying real estate in Australia can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Where will property prices be in 5 years in Australia?
What is the 5-year property price forecast for Australia as of 2026?
As of early 2026, cumulative property price growth in Australia over the next 5 years (to 2031) is expected to be approximately 20% to 30%, based on structural supply constraints and ongoing population growth.
The range of 5-year forecasts spans from a conservative scenario of around 15% to 18% cumulative growth (if rates stay higher for longer and supply improves) to an optimistic scenario of 35% to 40% (if rates fall and supply remains constrained).
This translates to a projected average annual appreciation rate of roughly 3.5% to 5.5% per year over the next 5 years in Australia, which is below the historical long-run average but reflects current affordability constraints.
The key assumption most forecasters rely on for 5-year property price predictions in Australia is that housing supply will remain structurally short of demand, as the National Housing Accord target of 1.2 million homes by 2029 appears unlikely to be met given current construction capacity.
Which areas in Australia will have the best price growth over the next 5 years?
The top three areas in Australia expected to have the best price growth over the next 5 years are Greater Perth (benefiting from relative affordability and mining sector strength), Southeast Queensland growth corridors (population inflows and Olympics-related infrastructure), and Adelaide's metropolitan fringe (affordability and lifestyle appeal attracting interstate migrants).
These top-performing areas in Australia are projected to achieve 5-year cumulative price growth of 30% to 50%, outperforming the national average of 20% to 30%.
This differs from the shorter 2026 forecast because over 5 years, infrastructure completion effects become visible, and areas currently building new transport links and amenities will see those investments translate into sustained demand and price gains.
The currently undervalued area in Australia with the best potential for outperformance over 5 years is Melbourne's western suburbs (like Sunshine, Werribee, and Tarneit), which remain below previous peaks and stand to benefit from the Melbourne Airport Rail and Suburban Rail Loop projects.
What property type will give the best return in Australia over 5 years as of 2026?
As of early 2026, the property type expected to give the best total return over 5 years in Australia is well-located townhouses and medium-density dwellings in supply-constrained, high-demand suburbs near transport and employment hubs.
The projected 5-year total return (capital growth plus rental income) for quality townhouses in strong Australian locations is approximately 40% to 55%, combining around 25% to 35% appreciation with 3% to 4% annual rental yield.
The main structural trend favoring townhouses and medium-density housing over the next 5 years in Australia is the ongoing affordability shift, as detached houses become increasingly out of reach for average buyers and policy encourages densification near transport.
For investors seeking the best balance of return and lower risk over 5 years in Australia, quality apartments in inner and middle-ring suburbs of Brisbane and Perth offer strong rental yields (around 4% to 5%) combined with moderate capital growth potential and high liquidity.
How will new infrastructure projects affect property prices in Australia over 5 years?
The top three major infrastructure projects expected to impact Australian property prices over the next 5 years are Western Sydney International Airport (opening late 2026, creating 28,000 jobs by 2031), Melbourne's Suburban Rail Loop (connecting major employment hubs), and Brisbane's Cross River Rail (transforming inner-city connectivity ahead of the 2032 Olympics).
Properties near completed infrastructure projects in Australia typically command a price premium of 10% to 20% compared to similar properties without improved transport access, with the effect most pronounced for properties within 800 meters of new train stations.
The specific neighborhoods in Australia that will benefit most from these infrastructure developments include Badgerys Creek, St Marys, and Luddenham in Western Sydney (airport and metro), Clayton and Glen Waverley in Melbourne (Suburban Rail Loop), and Woolloongabba and Boggo Road in Brisbane (Cross River Rail).
How will population growth and other factors impact property values in Australia in 5 years?
Australia's population is projected to grow by approximately 1.5% annually over the next 5 years (adding roughly 400,000 people per year), which translates to demand for about 160,000 to 200,000 additional dwellings annually and will continue to underpin property values in high-demand areas.
The demographic shift with the strongest influence on property demand in Australia over 5 years is the growth in single-person and couple-without-children households, which increases demand for smaller dwellings (units and townhouses) relative to large family homes.
Migration patterns, including both overseas arrivals and interstate movement, are expected to continue concentrating demand in Queensland, Western Australia, and South Australia, while Victoria's share of migration may recover as Melbourne's relative affordability improves.
The property types and areas that will benefit most from these demographic trends in Australia are medium-density housing (townhouses, apartments) in middle-ring suburbs of Brisbane, Perth, and Adelaide, where affordability meets accessibility to jobs and amenities.
We made this infographic to show you how property prices in Australia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What is the 10 year property price outlook in Australia?
What is the 10-year property price prediction for Australia as of 2026?
As of early 2026, cumulative property price growth in Australia over the next 10 years (to 2036) is expected to be approximately 45% to 70%, assuming no major structural policy shock that permanently changes supply or demand dynamics.
The range of 10-year forecasts spans from a conservative scenario of around 35% to 45% cumulative growth (if supply catches up and rates normalize higher) to an optimistic scenario of 80% to 100% (if supply remains chronically short and population growth exceeds expectations).
This translates to a projected average annual appreciation rate of roughly 3.8% to 5.5% per year over the next 10 years in Australia, which reflects the reality of periodic cycles (ups and downs) rather than smooth growth.
The biggest uncertainty factor in making 10-year property price predictions for Australia is whether construction capacity can meaningfully expand to meet housing targets, as this will determine whether chronic undersupply continues or the market eventually rebalances.
What long-term economic factors will shape property prices in Australia?
The top three long-term economic factors that will shape property prices in Australia over the next decade are real wage growth and productivity (determining household purchasing power), the average interest rate regime across cycles (affecting borrowing capacity), and construction capacity and costs (determining whether supply can catch demand).
The single long-term economic factor with the most positive impact on Australian property values is continued population growth driven by skilled migration, as Australia's attractiveness as a destination for workers and students creates persistent housing demand in major cities.
The single long-term economic factor posing the greatest structural risk to Australian property values is a sustained period of low productivity growth, which would constrain wage increases and gradually erode households' ability to service mortgage debt at current price levels.
You'll also find a much more detailed analysis in our pack about real estate in Australia.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Australia, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| Australian Bureau of Statistics (Total Value of Dwellings) | Australia's official national statistics agency providing definitive dwelling value data. | We used it to anchor Australia-wide average dwelling prices and track how values have moved recently across states. |
| ABS Lending Indicators | Official dataset for new home loan commitments by owner-occupiers and investors. | We used it to track whether demand is being driven by owner-occupiers versus investors and explain price momentum by property type. |
| ABS Monthly CPI Indicator | Official inflation read including housing-related cost components. | We used it to describe the cost-of-living backdrop shaping buyer budgets and borrowing capacity. |
| Reserve Bank of Australia (Cash Rate) | Primary source for Australia's official policy interest rate. | We used it to explain mortgage rate pressure and how borrowing power changes when rates move. |
| RBA Household Sector Chart Pack | Central bank's curated dashboard of housing and household balance sheet indicators. | We used it to triangulate housing price trends with household debt, approvals, and demand indicators. |
| APRA (High DTI Lending Limits) | Banking regulator whose macroprudential moves directly affect housing credit growth. | We used it to explain how lending rules can cap stretch borrowing and reduce price acceleration. |
| Australian Government Budget 2025-26 (Housing) | Government's official statement of housing supply targets and policy settings. | We used it to ground the supply-side story including National Housing Accord targets and reform pace. |
| Treasury National Housing Accord | Treasury's official policy hub for the Accord structure and commitments. | We used it to cross-check supply reform timelines and explain why supply improvements take time to affect prices. |
| Infrastructure Australia | National infrastructure adviser whose pipeline shapes accessibility and long-run housing demand. | We used it to identify why certain corridors with new transport links tend to attract demand and price growth. |
| Cotality Home Value Index | Australia's most-cited housing value index with transparent methodology and huge coverage. | We used it to pin down the latest national growth rate and how momentum is changing entering 2026. |
| Cotality Best of the Best 2025 | Systematic suburb-level breakdown from a major index provider, not anecdotes. | We used it to name real suburbs that led growth and show how affordability-driven growth comes from lower-price pockets. |
| PropTrack Home Price Index | Major method-based index run by a large listed real estate platform with deep analytics. | We used it to cross-check year-on-year growth and identify which capitals were strongest into January 2026. |
| PropTrack Top Performing Suburbs | Suburb ranking drawn from PropTrack's index methodology published by a major national platform. | We used it to provide named suburb examples for fastest risers by city and by apartments. |
| Domain House Price Report | Major established property portal with a long-running research series and consistent definitions. | We used it to triangulate median house versus unit levels and narrative across capitals. |
| SQM Research Vacancy Rates | Widely referenced rental market dataset used by media and analysts with historical continuity. | We used it to explain how tight rental markets keep investors active and support prices. |
| Domain 2026 Forecasts | Compilation of major bank economist forecasts providing comparable market expectations. | We used it to present the range of 2026 price growth forecasts from CBA, NAB, ANZ, and Westpac. |
| AMP Oliver's Insights | Respected economist analysis with detailed market commentary and rate impact modeling. | We used it to understand how rate cuts affect borrowing capacity and translate to price movements. |
| Property Update Market Forecasts | Aggregator of expert forecasts and market analysis with regular updates. | We used it to cross-reference bank forecasts and gather additional expert commentary on 2026 outlook. |
| .id Population Research | Demographic specialists with deep expertise in population forecasting and migration analysis. | We used it to understand current population growth rates and migration trends affecting housing demand. |
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If you want to go deeper, you can read the following: