No ‘losers’: Housing market upturn leaves no state behind

Australia’s residential property market is expected to move into 2026 without any major underperforming jurisdictions, according to the latest Hotspotting Price Predictor Index (PPI) for Summer 2025–26.

The report suggests that rising prices are likely across most capital cities and regional markets, with buyer activity running ahead of available stock.

“The year is set to begin with enormous momentum, thanks to elevated buyer demand in all of the major market jurisdictions, against a background of supply shortages,” said Terry Ryder (pictured top right), founder at Hotspotting.

“I see the current situation as highly unusual, with strong buyer demand in all eight capital city and six regional market jurisdictions assessed – therefore, there are no apparent major market losers as we head into 2026.

“We have seldom seen such universal strength in markets nationwide with no withering major markets anywhere in Australia – not even during that short COVID boom was sales activity so universally strong.”

For mortgage professionals, the outlook points to continued demand for finance across both detached housing and unit markets, with affordability pressures further pushing borrowers towards outer-ring suburbs and attached dwellings in inner and middle rings.

Broad-based ‘winner’ markets

The PPI classifies 11 of 14 major jurisdictions as “winners”, based on the proportion of suburbs and towns showing rising sales volumes. Darwin, Hobart, Brisbane and Melbourne top the latest rankings, each recording at least 70% of markets in positive territory.

Darwin is described as the strongest market nationally, with quarterly sales volumes more than doubling over the past year. “In the past two years, the Darwin residential market typically recorded between 530 and 640 sales per quarter, but in the past four quarters total sales have more than doubled,” said Tim Graham (pictured top left), director at Hotspotting.

“In fact, the latest quarter is 147% higher than the same time last year. We also highlighted Darwin’s upturn in the PPI a year ago, with the startling rise in its market emphatically confirmed in the Spring edition three months ago.”

Hobart, which had been flagged as a weaker market a year ago, has since shifted into the “winner” category. The latest quarter shows a 22% increase in sales compared with the previous period and a 29% rise year-on-year, with more affordable suburbs in Greater Hobart, such as those in Glenorchy, recording some of the strongest gains.

Brisbane is now at its firmest point since the height of the COVID-era upswing, with total sales across Greater Brisbane up 14% quarter-on-quarter and seven in 10 markets showing positive trends. All five local government areas that make up Greater Brisbane are reporting similar patterns of rising activity.

Melbourne’s recovery has continued, with 70% of markets now rated positive, up from 64% in the previous quarter and 51% six months earlier. While overall sales dipped slightly on a quarterly basis, activity remains around 15% higher than half a year ago. Outer-ring municipalities such as Casey, Frankston, Dandenong, Hume, Wyndham, Melton and Whittlesea are highlighted for their relative affordability, while inner and middle-ring unit markets including Melbourne, Yarra, Whitehorse and Kingston are also attracting demand.

Regional New South Wales is again approaching the activity levels seen during the 2021 COVID boom. Sales volumes in the latest quarter rose a further 10%, taking activity 18% higher than six months ago, with 65% of markets classed as positive. The Hunter Region – including Cessnock, Maitland, Singleton and Muswellbrook – together with Newcastle, Lake Macquarie and Port Stephens, are among the standouts.

Adelaide has extended a five-year run of price growth, with more markets moving into positive territory in the latest survey. Demand remains broad-based across the metropolitan area, including in higher-priced suburbs as well as lower-priced areas that have already seen significant appreciation, reducing the number of “cheap” options.

Sydney has also moved off its recent trough. Total sales across Greater Sydney are now 25% higher than six months ago. “Sydney’s ‘winner’ status has been maintained, with 63 per cent of the 640 Greater Sydney markets in our latest analysis receiving positive rankings,” said Graham. He added that high demand for attached dwellings is driving much of the improvement, with a larger share of unit markets recording positive rankings than house markets.

Canberra, which had been in a quieter phase, is now described as a rising market, with transaction levels close to those seen at the peak of the pandemic boom. Unit markets in suburbs such as Belconnen, Braddon, Coombs, Dickson, Greenway, Kingston, Phillip and Wright have been particularly active.

Regional Victoria’s recovery has accelerated since mid‑2024, with 62% of markets now classed as positive. LGAs including Latrobe Valley, Baw Baw, Bendigo, Geelong, Ballarat, Shepparton and Mitchell are identified as having strong and consistent sales activity.

Regional Tasmania has shifted from “solid and steady” to a rising market, recording a 13% lift in sales in the latest quarter and a 23% increase compared to a year earlier. Northern centres, especially Launceston and suburbs such as Invermay, Newnham and South Launceston, are among the key growth locations.

Regional Queensland, which appeared to be easing after several intense years, has also seen a renewed lift. Total sales are up 12% year-on-year and 20% on the previous quarter. The Gold Coast again leads activity, with strengthening conditions in the Sunshine Coast and Noosa, and renewed demand in Townsville and Cairns.

Supply constraints and demand drivers

Hotspotting links the broad-based strength to entrenched supply shortages and multiple demand drivers. “We continue to build far too few new dwellings, listings of properties for sale are extremely low everywhere, and vacancies continue to hover around historically low levels – where they have been stuck for five years,” Ryder said.

“Federal and state governments remain clueless in dealing with the fundamental issues driving prices and rents higher, including the high cost of building new dwellings. Indeed, any government measures that impact on the housing crisis make it worse, including recent federal policies to ‘assist’ first home buyers, which have only helped push prices higher.”

Graham pointed to policy and macroeconomic settings that are amplifying demand. “There is also high population growth boosted by overseas migration and ongoing internal migration, heightened demand from young buyers thanks to government first-home buyer schemes, and relatively cheap money following three reductions in interest rates earlier in 2025,” he said.

“The search for affordability is increasingly a driver of buyer demand, placing greater focus on cheaper house markets and on unit markets in locations where houses are very expensive. For example, the strongest market sectors in both Melbourne and Brisbane are outer-ring housing markets and near-city unit markets.”

For lenders and brokers, these dynamics suggest continued competition for stock, sustained pressure on affordability, and ongoing demand for loan products tailored to first home buyers, investors and upgraders in both metropolitan and regional markets.

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