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From Sydney to Perth: Where investors should focus in 2026
In 2026, Australia’s property market will remain broadly steady, but investment opportunities will vary across regions and capitals as affordability pressures and policy changes continue to influence returns.
The Real Estate Buyers Agents Association of Australia (REBAA) has given its prediction for the 2026 property market, forecasting a stable yet diverse market across the nation, as schemes, reforms, and affordability challenges will continue to shape the country.
REBAA president Melinda Jennison said that over the year, the Australian market has performed variably, with some areas softening while affordable markets remained resilient.
“Across the country, demand for well-located, quality homes and investment-grade assets has remained solid, even as many buyers adjust expectations on budget, location and dwelling type,” Jennison said.
Nationwide, Jennison said that more affordable areas and lower-priced market segments will continue to draw strong demand from first home buyers, boosted by the government’s schemes, while premium markets have settled after earlier rapid growth.
“Overall, the national picture is one of divergent but generally stable market performance, with local economic conditions, migration trends and policy settings all playing a role,” she said.
“In this environment, professional buyers’ agents have become increasingly important in helping home buyers and investors navigate competitive and complex conditions.”
NSW
REBAA NSW state representative Linda Johnson said the state has moved through 2025 in a surprisingly firm upswing.
“After a soft start to the year, price growth has reaccelerated as buyers adjusted to higher mortgage costs and accepted that a sharp correction was unlikely,” Johnson said.
Johnson said metropolitan Sydney’s market has been defined by scarcity rather than frenzy, with below-average listings and near-record low vacancies driving prices and rents upward.
She said that demand has shifted from inner-city suburbs to affordable middle-ring areas, with townhouses and attached homes attracting buyers trading land size for lower prices.
“Investor activity has lifted cautiously on the back of stronger yields, but highly leveraged buyers are still constrained by serviceability buffers.”
“Across NSW, both houses and units recorded solid gains, with regional markets again edging ahead of Sydney on a percentage basis.”
According to Johnson, regional NSW has maintained pandemic-era gains, with lifestyle and commutable centres like the Hunter, Illawarra, Central Coast, and Dubbo reaching new price peaks due to migration, tight rental markets, and higher yields.
Similarly, she said the expanded First Home Guarantee has drawn more buyers to outer-metro Sydney and key regional centres, but high construction costs and planning delays remain hurdles.
In addition to increases in dwelling prices, Johnson said the state's rental reforms and underquoting crackdown have shaped the market and affected buyer activity.
“Whilst providing more tenant security, there’s landlord uncertainty, with some investors more cautious and considering selling or switching asset classes.”
“There has been no material easing on rents or vacancies,” she said.
Johnson said that despite policy changes, NSW’s market will remain driven by interest rates, chronic undersupply, population growth, and tight rentals, with inflation limiting near-term rate cuts.
“This backdrop suggests 2026 is likely to deliver more of the same – tight rental conditions, persistent undersupply and moderate, uneven price growth rather than a boom.”
“Quality, family-suitable and investment-grade stock in both metro and key regional centres, is expected to stay highly contested, while secondary assets and fringe locations will see more measured and increasingly price-sensitive demand.”
Victoria
In Melbourne, REBAA Victoria’s Matt Scafidi said the market has regained momentum, driven by low vacancies, record-low approvals, strong demand, and affordability, with houses and townhouses leading growth ahead of 2026.
Scafidi said that after a relatively flat 2024, Melbourne’s property prices have steadily increased in the second half of 2025, with October up 0.9 per cent and the September quarter rising one per cent overall.
Similarly, data showed that auctions in the capital city have surged, signalling renewed buyer activity.
According to Scafidi, Melbourne even outpaced Sydney’s growth in October, driven by a rapid shift in momentum as cleared stock earlier in the year meets demand, now outstripping supply.
“Melbourne is also still far more affordable than Sydney, with land packages around $700,000 compared to Sydney’s $1.15 million, so investors are circling again looking for value,” he said.
Yet, he said that not all of Melbourne has been performing evenly, with houses and townhouses on desirable land leading growth, while high-rise and off-the-plan apartments continued to struggle due to oversupply and weaker tenant demand.
“The suburbs doing best are the inner- and middle-ring pockets where families, professionals, and long-term owner occupiers want to be,” he said.
According to Scafidi, Melbourne is expected to be one of Australia’s strongest performers in 2026, with price growth of around 10 per cent over the next year.
“Analysts are tipping Melbourne to hit new record highs by the end of the first quarter of 2026, which says a lot about where the market is heading,” he said.
“For buyers, now is one of those rare countercyclical windows – prices are still below previous peaks, sentiment is improving, and competition is building but not yet crazy.”
“If you focus on high-quality, investment-grade homes in tightly held suburbs, the next 12 to 24 months could be very rewarding.”
Western Australia
REBAA Western Australia’s (WA’s) Peter Gavalas said Perth’s strong performance has been driven by low stock, high demand, rising prices and robust yields, with tight conditions expected into 2026.
Gavalas said that in 2025, the Perth market has seen dwelling values rise by 9.4 per cent year-to-date and 5.4 per cent in the last quarter.
Regional WA also saw gains, with median values rising 13.5 per cent, while sales volumes remained steady and listings fell sharply, highlighting ongoing supply constraints and strong investor interest.
Similarly, rental vacancy rates remained below average at 2.2 per cent, driving a 5.8 per cent rise in median rents, while gross yields stayed among the nation’s highest at around four per cent.
In addition, Gavalas said this year’s interest rate cuts and the October launch of the First Home Guarantee have boosted Perth market demand and further tightened stock levels since July.
“The sub-$850,000 price point – aligned with the scheme’s cap – has experienced particularly strong growth, with properties frequently selling 10 to 12 per cent above the asking price and attracting 10 or more offers,” he said.
“We also saw more investors return to the market as confidence in Perth’s price outlook strengthened and rental yields remained robust.”
“Investor activity is now heavily concentrated in the same price bracket as first home buyers, adding further pressure to that segment.”
In the local market, Gavalas said upgraders drove strong demand for quality family homes on larger lots in premium suburbs, while downsizers sought smaller, renovated homes to simplify living and release equity.
“The expectation is that prices will remain strong through the remainder of the year, with ongoing upward pressure forecast into 2026.”
“Persistently low supply, combined with growing pent-up demand, is likely to keep market conditions tight and price growth elevated.”
Queensland
REBAA Queensland's Melinda Granzien said the state’s property market remained resilient in 2025, driven by strong buyer activity, limited supply, short selling timeframes, and sustained demand across Brisbane and key regional centres.
“Brisbane continues to stand out as one of the most competitive capital city markets, driven by low stock levels, population growth, and increased buyer readiness,” Granzien said.
“Well-presented homes are attracting immediate interest, and many are selling within the first one to two weeks. Days on market have tightened noticeably since mid-year, and momentum remains strong across the middle and outer rings.”
As the market remained strong, Granzien said that demand for townhouses and units rose as buyers adapted to borrowing limits.
Across regional Queensland, she said conditions stayed positive, with centres such as Toowoomba, Ipswich, Rockhampton, the Fraser Coast, and the Whitsundays benefiting from lifestyle migration and economic stability.
Additionally, Granzien said that the state’s low stock, short days on market, low vacancies, and strong rental demand have kept investor confidence high.
She said that throughout the state, investors have been prioritising yield, property condition, and long-term performance despite higher living costs and broader economic uncertainty.
“Looking ahead, Queensland is entering 2026 with solid fundamentals. Population growth is expected to remain strong, rental supply will stay tight, and major infrastructure projects are progressing across the state.”
“While affordability will continue to influence decisions, Queensland is well-positioned for steady, sustainable conditions in the year ahead. The combination of demand, limited supply, and improving transparency provides a stable foundation for 2026.”
South Australia
REBAA South Australia's (SA’s) Matt O’Donoghue said South Australia’s 2025 property market saw record prices, strong rental yields, and constrained supply, with both metropolitan and regional areas showing resilient growth.
“The South Australia market kicked off this year as it has every year post COVID-19 – with all suburbs in Adelaide showing huge demand, be it $500,000 units or multimillion-dollar dwellings,” O’Donoghue said.
“2025 has proved to have record-high property prices in virtually all suburbs, along with strong rental yields, basically due to SA still having high demand in rental properties, coinciding with ongoing supply constraints.
He said South Australia’s median house price hit $800,000 in September 2025, with resilient rental markets yielding 4.7 per cent and annual house and unit growth boosting investor confidence.
In regional areas, O’Donoghue said that robust growth has continued, with median dwelling values rising 10.4 per cent to $495,290, as houses average $507,232 and units $371,852, highlighting strong demand across both sectors.
“Migration trends and lifestyle appeal continue to fuel demand, while easing interest rates may encourage more activity in the months ahead,” he said.
“Both metropolitan Adelaide and regional towns are benefiting, making the state one of Australia’s most resilient real estate markets,” O’Donoghue concluded.
