Prices forecast to rise across all capitals, with East Coast cities showing strongest momentum
Australia’s housing market is projected to maintain upward momentum over the next year, according to Domain Group’s latest Price Forecast Report.
The research points to further house price gains in the country’s largest capitals, while markets in smaller cities begin to slow after recent growth spurts.
Sydney and Melbourne are expected to lead national price increases. Sydney’s median house price is forecast to rise 7% to $1.83 million – an increase of $112,000 – driven by persistent demand and limited housing supply. Melbourne’s market is also set to climb, with a 6% gain projected to push prices to $1.1 million. This would mark a full recovery from a two-year downturn, while keeping the city significantly more affordable than Sydney.
Brisbane and Adelaide are tipped for smaller price increases. Brisbane is set to grow 5%, reaching $1.09 million, while Adelaide is expected to rise 4% to $1.05 million. Both cities will likely hit new price peaks, although their growth is slowing following several years of strong performance.
In Perth, house prices are anticipated to grow by 5% to reach $982,000. The city may reach the million-dollar median by 2026, supported by strong migration, relative affordability, and rising incomes.
Canberra is forecast to see a 4% increase, with median house prices hitting $1.10 million. Despite the gain, the city remains the most affordable capital when considering income levels, due in part to moderate population growth and a more balanced market.
“East coast markets are regaining momentum, but growth will depend heavily on local factors like affordability and population changes,” said Nicola Powell (pictured), Domain’s chief of research and economics.
“Lower interest rates, cheaper borrowing, and targeted support for first-home buyers will keep prices rising, especially in Sydney and Melbourne, which are most sensitive to rate changes. The double-digit price growth we saw in Brisbane, Perth, and Adelaide are also forecast to soften.
“Even with more rate cuts on the horizon that will increase buyer capacity, the upswing in house prices is expected to be more modest than in previous rate-cutting cycles. This reflects forecasts of smaller, more gradual rate reductions and ongoing affordability challenges, with housing costs continuing to take up a significant portion of household income in most capital cities.”
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