Proptrack forecasts further gains, but momentum expected to slow
Australia’s capital city housing markets are expected to extend their upswing into 2026, with new forecasts indicating the combined median house price across the major capitals could move above $1 million for the first time.
According to Proptrack’s latest projections, the combined median capital city house price is anticipated to climb by between 6% and 8% over the next year. On this basis, the current median of $979,000 recorded in November 2025 would be pushed beyond the $1 million mark.
Despite prices sitting at record levels, Angus Moore (pictured right), senior economist at REA Group, said the rate of increase is showing signs of easing.
“The tight supply backdrop that has supported price growth this year remains, yet stretched affordability and an extended pause on interest rates are set to temper the pace of growth,” he noted.
Moore added that, while values are expected to continue rising, the current upswing is unlikely to match the 20% to 30% annual gains seen in previous booms. He pointed to limited new housing supply and lower interest rates as key supports, coinciding with ongoing demand from buyers trying to secure a foothold in the market.
“Demand will be supported by population inflows, income growth, investor activity, and a recovery in borrowing capacity following 2025’s series of rate cuts,” Moore said.
The forecasts suggest notable regional differences will persist.
Perth and Brisbane are expected to remain the strongest-performing capital city markets, although both are projected to slow from the rapid growth rates seen in recent years. Proptrack attributes Perth’s resilience to strong population growth and tight rental conditions, while Brisbane is expected to continue to outperform despite coming off a period of significant growth.
Source: Proptrack
Sydney’s dwelling values are tipped to gain between 5% and 7% in 2026. However, affordability pressures are likely to push a greater share of buyer activity towards middle- and outer-ring suburbs, with premium inner-city areas already at high price points.
Melbourne, which has lagged other capitals through much of the recent cycle, is forecast to post a similar uplift of about 5% to 7% in the year ahead as it recovers from underperformance.
Adelaide’s pronounced price growth over recent years has made affordability a challenge for many households, with analysts expecting a natural slowdown in momentum as the market consolidates.
Hobart, having failed so far to reclaim its 2022 price peak, is seen as being in a consolidation phase. Yet across all capitals, affordability remains stretched relative to local income levels, reinforcing the importance for brokers and lenders of careful serviceability assessments as borrowing capacity recovers.
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