How's the real estate market doing in Australia? (2026)

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

How's the real estate market going in Australia in 2026?

What's the average days-on-market in Australia in 2026?

As of early 2026, the estimated average days-on-market for residential properties in Australia is around 27 days nationally, which signals that properties are still selling relatively quickly in most cities.

However, this number varies significantly depending on where you're buying: Perth currently leads with properties selling in just 9 days on average, while Canberra and Darwin sit at the slower end with 35 to 37 days, so your experience will differ based on location.

Compared to one or two years ago, selling times have actually shortened slightly from around 29 days in 2024, reflecting sustained buyer demand despite affordability pressures and elevated interest rates in Australia's housing market.

Are properties selling above or below asking in Australia in 2026?

As of early 2026, the estimated average sale-to-asking price ratio in Australia shows that most properties sell around 3% below the original asking price, meaning buyers typically have some room to negotiate.

Based on Cotality's vendor discounting data and Domain's auction results, roughly 60% to 65% of properties sell at or below asking, while 35% to 40% sell at or above asking, though this ratio shifts dramatically depending on the city and property type, so confidence in these numbers is moderate outside of high-frequency markets like Sydney auctions.

In Australia, the property types most likely to see bidding wars and above-asking sales are detached houses in Perth, Brisbane, and Adelaide (where stock is critically low), as well as homes in Sydney's Inner West and Melbourne's inner-north, particularly in gentrifying suburbs close to new metro infrastructure.

By the way, you will find much more detailed data in our property pack covering the real estate market in Australia.

What kinds of residential properties can I realistically buy in Australia?

What property types dominate in Australia right now?

The estimated breakdown of residential property types available for sale in Australia is roughly 55% to 60% detached houses, 30% to 35% apartments and units, and 10% to 15% townhouses and semi-detached homes, though this mix varies significantly between cities.

Detached houses remain the single largest share of Australia's housing market, particularly in outer suburban areas and smaller capitals like Perth, Adelaide, and Brisbane, where land availability still supports new house-and-land developments.

This dominance of detached houses became so prevalent in Australia because of the country's low population density, strong cultural preference for standalone homes with backyards, and decades of suburban expansion policies that prioritized land releases over inner-city infill until recent years.

If you want to know more, you should read our dedicated analyses:

• How much should you pay for a house in Australia?

Are new builds widely available in Australia right now?

The estimated share of new-build properties among all residential listings in Australia is around 15% to 20%, which means the majority of what's on the market remains existing stock, and competition for newly constructed homes can be intense.

As of early 2026, the neighborhoods with the highest concentration of new-build developments in Australia include Western Sydney's Aerotropolis corridor near the new Western Sydney Airport, Brisbane's inner suburbs like Woolloongabba and Bowen Hills, Perth's northern growth corridors like Alkimos and Yanchep, and Melbourne's outer-growth areas such as Clyde North and Tarneit.

Which neighborhoods are improving fastest in Australia in 2026?

Which areas in Australia are gentrifying in 2026?

As of early 2026, the top neighborhoods in Australia currently showing the clearest signs of gentrification include Marrickville, Dulwich Hill, and Campsie in Sydney; Footscray, Preston, Coburg, and Reservoir in Melbourne; Woolloongabba, Stafford, Kedron, and Wavell Heights in Brisbane; and Bayswater and Maylands in Perth.

The visible changes indicating gentrification in these areas include the arrival of specialty coffee shops and boutique cafes replacing older takeaways, warehouse conversions into creative studios and co-working spaces, rapid renovation of Victorian and Federation-era terraces, and a demographic shift toward young professionals and families priced out of more established inner-city suburbs.

Over the past two to three years, price appreciation in these gentrifying neighborhoods in Australia has ranged from 15% to 35%, with Brisbane's Woolloongabba and Perth's Bayswater seeing particularly strong gains due to a combination of infrastructure investment and relative affordability compared to Sydney and Melbourne.

By the way, we've written a blog article detailing what are the current best areas to invest in property in Australia.

Where are infrastructure projects boosting demand in Australia in 2026?

As of early 2026, the top areas in Australia where major infrastructure projects are currently boosting housing demand include the Sydney Metro West corridor (Parramatta to the CBD), the Western Sydney Aerotropolis around the new airport, Melbourne's Suburban Rail Loop influence zones around Clayton and Box Hill, and Brisbane's Cross River Rail station precincts.

The specific infrastructure projects driving demand in Australia include the Sydney Metro West line with stations at Westmead, Sydney Olympic Park, Five Dock, and Pyrmont; the Western Sydney International Airport opening in late 2026; Melbourne's Suburban Rail Loop connecting Clayton, Cheltenham, and Monash University; and Brisbane's Cross River Rail with new underground stations at Albert Street and Woolloongabba.

The estimated timeline for completion of these major projects in Australia varies: Sydney Metro West is expected to open in 2032, Western Sydney Airport begins operations in late 2026, Brisbane's Cross River Rail opened in 2025, and Melbourne's Suburban Rail Loop Stage 1 is targeted for the early 2030s.

The typical price impact on nearby properties in Australia once such infrastructure projects are announced versus completed shows an initial "announcement premium" of 5% to 10%, followed by additional gains of 10% to 20% as construction progresses and the opening date approaches, though areas that have already run up in price may see more modest uplift by completion.

What do locals and insiders say the market feels like in Australia?

Do people think homes are overpriced in Australia in 2026?

As of early 2026, the general sentiment among locals and market insiders in Australia is that homes feel stretched and overpriced relative to incomes, though many acknowledge that structural supply shortages justify some of the premium.

The specific evidence locals typically cite when arguing homes are overpriced in Australia includes the price-to-income ratio exceeding 8 times median household income in Sydney and Melbourne, mortgage repayments consuming over 50% of median household income in major cities, and the fact that a median Sydney house at around A$1.4 million is unattainable for most single-income buyers without family help.

Those who believe prices are fair in Australia often point to the chronic undersupply of housing (with an estimated shortfall of 200,000 to 300,000 dwellings), strong population growth adding nearly 400,000 people per year, and the historical track record showing that Australian house prices have tripled roughly every 20 years since World War II.

Australia's price-to-income ratio in 2026 sits at around 7.5 to 8.5 times median household income nationally, which is significantly higher than the regional average for comparable English-speaking markets like the United States (around 4 to 5 times) and places Australia among the least affordable housing markets globally.

What are common buyer mistakes people regret in Australia right now?

The most frequently cited buyer mistake people regret making in Australia is underestimating strata and body corporate costs for apartments, along with not conducting proper building inspections, which has led many buyers to discover major defects like water damage or flammable cladding after settlement.

The second most common buyer mistake people mention regretting in Australia is buying based on a future infrastructure project that wasn't yet confirmed or fully funded, leading to years of waiting for a promised metro station or road upgrade that may be delayed or scaled back, while overpaying for the "potential uplift."

If you want to go deeper, you can check our list of risks and pitfalls people face when buying property in Australia.

It's because of these mistakes that we have decided to build our pack covering the property buying process in Australia.

How easy is it for foreigners to buy in Australia in 2026?

Do foreigners face extra challenges in Australia right now?

The overall difficulty level foreigners face when buying property in Australia in 2026 is significantly higher than for local buyers, primarily due to the temporary ban on purchasing established dwellings (running from April 2025 to March 2027) and the requirement to obtain FIRB approval for any residential purchase.

The specific legal restrictions applying to foreign buyers in Australia include the prohibition on buying existing homes during the ban period, mandatory FIRB approval before purchasing new dwellings or vacant land, conditions requiring construction to begin within 24 months for vacant land, and application fees ranging from A$14,700 for properties under A$1 million up to A$117,600 for properties over A$5 million.

The practical challenges foreigners most commonly encounter in Australia include navigating the multi-layered approval process (FIRB, state surcharges, and local council requirements), dealing with limited banking options since most major banks don't lend to non-residents, and managing time zone differences for settlement paperwork when purchasing from overseas.

We will tell you more in our blog article about foreigner property ownership in Australia.

Do banks lend to foreigners in Australia in 2026?

As of early 2026, mortgage financing is available for foreign buyers in Australia, but options are limited to a small number of non-bank lenders and specialist institutions, as most major Australian banks (like CBA, ANZ, Westpac, and NAB) do not offer mortgages to non-residents.

The typical loan-to-value ratios foreign buyers can expect in Australia range from 60% to 70%, meaning you'll need a deposit of 30% to 40%, and interest rates for non-residents generally run 1% to 2% higher than rates for Australian residents, currently sitting around 6.5% to 8% per annum depending on the lender and your profile.

Banks in Australia typically demand from foreign applicants a valid passport, FIRB approval documentation, translated financial statements and tax returns (via NAATI-certified translation), proof of income in an acceptable currency (preferably USD, GBP, EUR, or AUD), and evidence of the deposit source, with lenders often discounting foreign income by 20% to 40% to account for currency risk.

You can also read our latest update about mortgage and interest rates in Australia.

How risky is buying in Australia compared to other nearby markets?

Is Australia more volatile than nearby places in 2026?

As of early 2026, Australia's price volatility is moderate compared to nearby markets like New Zealand (which saw sharper recent corrections of 15% to 20%) and Singapore (which has tighter government controls limiting swings), placing Australia somewhere in the middle with typical cycle variations of 5% to 15%.

Over the past decade, Australia's historical price swings have included a 10% to 15% decline in Sydney and Melbourne during 2017-2019 when lending restrictions tightened, followed by a 25% surge in 2021 during the pandemic boom, whereas comparable markets like Auckland saw a similar boom but a deeper correction afterward, and Singapore maintained steadier but more constrained growth.

If you want to go into more details, we also have a blog article detailing the updated housing prices in Australia.

Is Australia resilient during downturns historically?

Australia's historical resilience during economic downturns has been relatively strong compared to other developed markets, with only six periods of national price decline in the past 40 years and most corrections being shorter and shallower than in the US, UK, or parts of Europe.

During the most recent major downturn (2017-2019), property prices in Australia's largest cities dropped around 10% to 15% from peak to trough, with Sydney experiencing the steepest falls, and recovery took approximately 18 to 24 months before prices returned to previous highs and then exceeded them.

The property types and neighborhoods in Australia that have historically held value best during downturns include detached houses in established inner and middle-ring suburbs with good schools and transport (such as Sydney's North Shore, Melbourne's Bayside, and Brisbane's inner south), while high-rise apartments in oversupplied areas like Melbourne's Docklands and Southbank have shown weaker resilience.

How strong is rental demand behind the scenes in Australia in 2026?

Is long-term rental demand growing in Australia in 2026?

As of early 2026, long-term rental demand in Australia remains structurally tight, with the national vacancy rate sitting around 1.4% in December 2025, well below the 3% threshold considered balanced, indicating that landlords continue to have strong tenant demand across most cities.

The tenant demographics driving long-term rental demand in Australia include young professionals aged 25 to 35 who are priced out of homeownership, international students returning post-pandemic (particularly in Sydney and Melbourne), skilled migrants on temporary visas, and families relocating for work who prefer to rent before committing to a purchase in an unfamiliar market.

The neighborhoods in Australia with the strongest long-term rental demand right now include Sydney's Inner West and Eastern Suburbs (near universities and hospitals), Melbourne's inner-north suburbs like Carlton and Fitzroy, Brisbane's Fortitude Valley and South Brisbane (near the CBD), and Perth's inner suburbs like Subiaco and Leederville where vacancy rates are often below 1%.

You might want to check our latest analysis about rental yields in Australia.

Is short-term rental demand growing in Australia in 2026?

The regulatory changes currently affecting short-term rental operations in Australia include New South Wales's 180-day annual cap for unhosted rentals in Greater Sydney, Victoria's new 7.5% Short Stay Levy on bookings under 28 days (effective January 2025), Western Australia's mandatory STRA registration, and the ability for Victorian strata buildings to vote to ban short-stays entirely.

As of early 2026, short-term rental demand in Australia is growing modestly at around 5% to 10% annually in terms of guest nights, though supply growth (15% to 25% more listings year-on-year) is outpacing demand in saturated markets like Sydney CBD, Melbourne CBD, and Surfers Paradise, putting pressure on occupancy and nightly rates.

The current estimated average occupancy rate for short-term rentals in Australia is around 58% nationally, with a realistic range of 45% to 70% depending on location, meaning a well-managed property can expect roughly 17 to 18 booked nights per month on average.

The guest demographics driving short-term rental demand in Australia include domestic leisure travelers (representing 60% to 70% of bookings), international tourists visiting Sydney, Melbourne, and the Gold Coast, business travelers seeking apartment-style stays, and digital nomads on longer stays who prefer flexible accommodation over hotels.

By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Australia.

What are the realistic short-term and long-term projections for Australia in 2026?

What's the 12-month outlook for demand in Australia in 2026?

As of early 2026, the estimated 12-month demand outlook for residential property in Australia is moderately positive, with buyer activity expected to remain solid in the first half of the year before softening in the second half as affordability constraints start to bite more sharply.

The key economic and political factors most likely to influence demand in Australia over the next 12 months include the Reserve Bank of Australia's interest rate decisions (with rates expected to hold steady around 3.6% to 4%), the ongoing housing supply shortage, population growth from migration (around 365,000 net additions expected), and the impact of expanded first home buyer schemes bringing tens of thousands of new buyers into the market.

The forecasted price movement for Australia over the next 12 months is an increase of approximately 5% to 7% nationally, with Perth, Brisbane, and Adelaide expected to outperform at 6% to 8%, while Sydney and Melbourne may see more modest gains of 4% to 6% due to affordability ceilings.

By the way, we also have an update regarding price forecasts in Australia.

What's the 3 to 5 year outlook for housing in Australia in 2026?

As of early 2026, the estimated 3 to 5 year outlook for housing prices and demand in Australia is broadly supportive, with most analysts expecting cumulative price growth of 20% to 30% nationally over this period, driven by persistent undersupply, strong population growth, and infrastructure investment.

The major development projects and urban plans expected to shape Australia over the next 3 to 5 years include Sydney Metro West (opening 2032), the Western Sydney Aerotropolis creating a new economic hub, Melbourne's Suburban Rail Loop reshaping middle-ring suburbs, Brisbane's 2032 Olympic Games infrastructure, and Perth's Metronet expansion connecting outer suburbs to the CBD.

The single biggest uncertainty that could alter the 3 to 5 year outlook for Australia is the path of interest rates and borrowing capacity: if the RBA is forced to raise rates due to persistent inflation or if APRA tightens lending buffers further, buyer power would shrink significantly and price growth could stall or reverse.

Are demographics or other trends pushing prices up in Australia in 2026?

As of early 2026, demographic trends are estimated to add 1% to 2% annually to housing price growth in Australia, as population growth of around 1.5% per year (driven primarily by immigration) continues to outpace the rate of new housing supply.

The specific demographic shifts most affecting prices in Australia include strong net overseas migration (around 350,000 to 400,000 people annually), household formation rates increasing as young adults seek to move out of shared housing, and an aging population downsizing from large family homes into smaller dwellings, which creates churn but also concentrates demand in certain segments.

The non-demographic trends also pushing prices in Australia include the continued shift to hybrid and remote work (supporting demand in lifestyle suburbs and regional areas within commuting distance), intergenerational wealth transfers with baby boomers helping children enter the market, and strong investor appetite driven by rental yields of 4% to 5% in cities like Brisbane, Perth, and Adelaide.

These demographic and trend-driven price pressures are expected to continue in Australia for at least the next 5 to 10 years, given the government's migration intake targets, the time needed to address the housing shortfall (estimated at 200,000 to 300,000 dwellings), and structural changes to how Australians live and work post-pandemic.

What scenario would cause a downturn in Australia in 2026?

As of early 2026, the most likely scenario that could trigger a housing downturn in Australia would be a combination of unexpectedly persistent inflation forcing the RBA to raise interest rates again, combined with a rise in unemployment that reduces household income and buyer confidence.

The early warning signs that would indicate such a downturn is beginning in Australia include auction clearance rates falling below 55% consistently across Sydney and Melbourne, days-on-market stretching beyond 45 days nationally, vendor discounting widening past 5%, and a noticeable uptick in mortgage arrears reported by APRA-regulated lenders.

Based on historical patterns in Australia, a realistic downturn scenario could see national prices decline by 10% to 15% from peak to trough over 12 to 18 months, with Sydney and Melbourne apartment markets likely to experience steeper falls (15% to 20%) while Perth, Brisbane, and Adelaide houses would likely prove more resilient due to tighter supply.

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.