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National property prices to surge over $1m median
Despite slower growth expected in 2026, investors are tipped to see strong capital gains surge as dwellings across the country are forecasted to reach over $1 million median.
The latest REA Property Outlook Report predicted a national price growth of 6–8 per cent in 2026, likely pushing the Australian median home value above $1 million.
The report found that while growth will be supported by higher borrowing capacity after the three 2025 rate cuts, ongoing affordability pressures will temper the pace of price rises.
“Australia’s housing market enters 2026 with prices still rising, but signs that momentum is moderating,” REA said.
REA forecasted that in 2026, income growth, investor activity, population inflows, and a rebound in borrowing capacity would sustain demand, while steady interest rates would cap further growth.
“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.”
“As a result, 2026 is more likely to deliver a steady and slower pace of growth compared to 2025, with stretched affordability meaning growth will remain well below the 20-30 per cent annual gains seen in past booms.”
On the supply side, the report found that new housing would continue to lag population growth, limiting the number of homes on the market and placing a floor under prices.
“These dynamics point to continued price growth in 2026, albeit at a slower pace than in 2025,” REA said.
“The exceptional outperformance of Perth, Brisbane and Adelaide seen in recent years is likely to narrow, while Sydney and Melbourne should see more modest gains.”
Sydney
According to the report, Sydney will experience more modest growth relative to 2025, with dwelling values no longer accelerating.
“With interest rates expected to remain on pause, the scope for further expansion in borrowing capacity is limited, and affordability constraints will be a headwind for growth,” REA said.
“More affordable outer and middle ring suburbs are likely to attract the bulk of demand.”
“With new supply constrained and rental markets tight, Sydney prices should move higher, but affordability will act as a ceiling on the pace of growth.”
Brisbane
Despite entering the 2026 market supported by several years of substantial gains, migration, tight stock levels, and infrastructure investments, REA said that the Brisbane market would struggle to maintain its momentum.
“Those fundamentals remain supportive, but the extraordinary pace of growth seen in the past few years is unlikely to persist as affordability becomes a more significant headwind,” REA said.
Lower-priced suburbs in Brisbane’s west are expected to show resilience, while some of the higher-value regions will likely experience a significant slowdown.
REA predicted that Brisbane would likely outpace the national average, but by a smaller margin than in previous years.
Perth
Similarly, the report found that Perth would remain one of the stronger capital cities, projected to grow by 7-10 per cent.
REA said that the Western Australian property market will continue to be driven by population inflows, tight rental conditions and an undersupply of new housing.
“However, after such a large increase in home prices in recent years, affordability has deteriorated and is set to gradually curb the growth rate.”
The report predicted that the most likely scenario was that Perth would continue to outperform the other national capitals, but at a slower rate of growth than its rapid rise over the past two years.
Melbourne
The report said that Melbourne would continue to recover from several years of underperformance relative to the other capital cities, with prices expected to rise by between 5 and 7 per cent in 2026.
“Higher levels of stock on the market after a relatively busy spring, giving buyers more choice and making conditions a little less competitive, will likely keep the pace of growth in Melbourne below the pace in the stronger capitals.”
Adelaide
Although real estate prospects in Adelaide will remain a solid option in 2026, REA noted that affordability may be a challenge following significant increases in home prices in recent years.
The report said that the South Australian market momentum would ease as higher home values moved beyond the means of some buyers.
“Price growth is expected to remain positive but below the pace of recent years as growth moderates,” it concluded.