What to expect from property prices in 2026
Australia's property market is poised for another strong year of growth in 2026. While growth will vary across cities and property types, the fundamentals point to upward pressure on prices, and, according to the latest Domain forecast, it will be a tale of two halves.
Double-digit growth in the first half, then a shift
Domain predicts house prices in the combined capitals will rise 9% over 2025-26. Sydney and Brisbane are expected to see the largest growth, at 10% to June 2026, pushing Sydney's median house price just under $2 million.
But the pace won’t stay the same all year. Affordability pressures and moderating sentiment are likely to slow growth later in 2026, with Sydney prices ending the year around 7% higher for houses and 4% for units.
Why early 2026 will be so hot
So why such a strong start? It comes down to a mix of tight supply and rising confidence. First, advertised stock remains low at 18% below the ten-year average, according to Cotality. With fewer homes available, buyers are competing for limited options, especially in sought-after suburbs.
Second, Sydney’s construction pipeline is struggling. Australian Bureau of Statistics (ABS) data shows that only 42,000 new dwellings were completed in the 2024-25 financial year in New South Wales, 9% lower than the previous year. Although dwelling approvals are up, approvals don’t always become completed homes. Delays, cancellations and feasibility issues all play a role, which means supply shortages are likely to continue.
Third, lower interest rates are encouraging more buyers back into the market. With additional rate cuts predicted for 2026, borrowing capacity has improved and buyers are regaining confidence. The Westpac-Melbourne Institute Consumer Sentiment index rose 9.7% year-on-year, reaching positive territory for the first time since February 2022. When confidence lifts, activity follows.
Adding to this pressure is NSW’s projected population growth, which the ABS expects to be around 1.4% over 2026. This increased demand adds to competition for limited stock.
First home buyer schemes boosting demand
There’s also another major force shaping the 2026 market: a sharp lift in first home buyer activity. The expanded 5% Deposit Scheme has been extremely popular, with guarantees increasing 48% year-on-year in October, the first month after the expansion.
More eligible buyers at lower price points means more competition, which naturally pushes prices up. According to Domain, “The expanded scheme could lift home prices by 3.5% to 6.6% in its first year.
The sooner you buy, the less you’ll pay
Put simply, the strongest growth is front-loaded. With conditions tightening early in the year, every month that passes could mean paying thousands more for the same home.
If you're considering buying, whether you're a first home buyer, upgrader or investor, the window to act before prices climb further is narrowing. The sooner you buy, the less you'll pay. And the best first step is to speak with a mortgage broker who can assess your options and help you move quickly when the right opportunity presents itself.
Want to stay ahead in a competitive market? As an award-winning mortgage broker in Sydney with more than 300 five-star Google reviews, Eventus Financial can help. Schedule a no-obligation consultation with Alex today to explore your options.