5 Expectations for Australian Property Prices 2026

As 2026 begins, Australia’s property market is building on the momentum of a strong year. Australian property prices rose sharply through 2025, buyer demand remains elevated, and housing supply continues to fall well short of population growth across much of the country.

At OwnerDeveloper, we believe the key questions are no longer whether the market will grow, but what will happen to property prices in 2026, where growth will occur, and under what conditions it will be sustained.

Looking ahead, 2026 is shaping up as another constructive year for property investment in Australia—one that will reward informed decision-making, disciplined feasibility analysis, and well-timed project delivery.

Here are five key expectations for property improvement in 2026, and what they mean for OwnerDeveloper’s

1. Australia Property Hotspots in 2026 Will Be Mid-Sized Capitals

Perth, Brisbane, and Adelaide have been standout performers in recent years, and most analysts expect these cities to remain Australia property hotspots in 2026.

These markets continue to be supported by:

• Persistent housing shortages

• Strong population and migration growth

• More affordable price points compared to Sydney and Melbourne

While Sydney and Melbourne are expected to see more moderate growth of approximately 3–7%, forecasts suggest double-digit price growth remains possible in select pockets of Perth, Brisbane, and Adelaide.

For OwnerDeveloper’s, this reinforces the opportunity to focus on supply-constrained suburbs, infill locations, and growth corridors where zoning supports medium-density outcomes and long-term property value growth.

2. Buyer Demand Will Continue to Outpace Housing Supply

A defining feature of the current cycle is the ongoing imbalance between buyer demand and new housing supply.

Listing volumes remain low, construction activity has not recovered to required levels, and investor participation has increased as borrowing conditions improve. At the same time, population growth continues to exceed dwelling completions.

As a result, buyer competition is expected to remain strong—particularly in the first half of 2026—placing continued upward pressure on property values in undersupplied markets.

For developers, this environment supports pricing but also increases pressure on:

• Construction timelines

• Trades and material availability

• Planning, approval, and certification pathways

Projects that are well-structured, shovel-ready, and efficiently delivered will be best positioned to benefit.

3. What Will Happen to Australian Property Prices in 2026?

National dwelling values increased by approximately 6.3% through 2025, driven by interest rate relief and a chronic shortage of quality housing stock.

Looking ahead, major banks and research institutions are forecasting further growth in Australian property prices in 2026, generally in the range of 6–10% nationally, depending on inflation trends and interest rate settings.

Even if interest rates remain on hold, the lagged impact of prior cuts is expected to continue flowing through:

• Buyer confidence

• Borrowing capacity

• Investor activity

For OwnerDeveloper’s, this suggests a market that still rewards well-located, well-designed projects, but with less tolerance for overly optimistic assumptions. Feasibility models must carefully consider end values, holding periods, and contingency allowances.

4. Affordability Will Be the Main Constraint on Property Value Growth

Despite the positive outlook, housing affordability remains the market’s most significant headwind.

Property values have risen sharply over the past five years, pushing affordability to historically low levels in many regions. Without further interest rate relief, borrowing capacity is likely to remain constrained—particularly for first-home buyers and upgraders.

This may slow the pace of property value growth in the second half of 2026, especially in markets that have already experienced rapid appreciation.

This environment highlights the importance of market-aligned product design. At OwnerDeveloper, we focus on developments that deliver genuine value—through efficient layouts, appropriate density, and realistic price points—allowing projects to remain competitive even as affordability tightens.

5. First-Home Buyers Will Continue to Shape Property Investment in Australia

The expansion of the federal Home Guarantee Scheme, allowing eligible buyers to purchase with as little as a 5% deposit, has materially reshaped demand at the lower end of the market.

As a result:

• Entry-level homes are attracting stronger competition

• Price growth is accelerating in affordable segments

• Buyers are entering the market earlier

This trend is expected to continue through 2026, particularly for townhouses, smaller homes, and units that fall within scheme price caps.

It closely aligns with OwnerDeveloper’s approach to property investment in Australia, focusing on duplexes, dual occupancies, and boutique townhouse projects that meet real demand while supporting sustainable property value growth.

What This Means for Property Investment in 2026

Overall, 2026 is shaping up as a strong but more disciplined property market. Growth opportunities remain—particularly in supply-constrained cities and affordable segments—but success will depend on:

• Accurate pricing assumptions

• Tight construction and holding cost control

• Realistic exit strategies

• Strategic project timing

At OwnerDeveloper, we assess Australian property prices and market trends through a development-first lens. The outlook for Australian property prices in 2026 remains positive, but the market is becoming increasingly competitive.

That’s why our approach is grounded in feasibility-first thinking, strategic site selection, and risk-controlled delivery—helping landowners and developers make confident, informed decisions.

Whether you’re considering a joint venture, dual occupancy, granny flat, or small townhouse development, aligning your project with the right Australia property hotspots in 2026 will be critical to maximising outcomes.

If you’d like a tailored analysis of how these trends apply to your land or next project, OwnerDeveloper would be pleased to assist.

Contact us to book a strategic property development consultation and discover how 2026 could be your strongest year yet.