Housing Prices to rise between 6% to 10%, All cities expected to record a rise in dwelling prices over 2026

Key takeaways

Overall, we are expecting a strong year for property prices except for our two largest capital cities.

We also anticipate this will be the first year since at least 2019 where we predict a small surplus in dwelling completions verses underlying demand.

Brisbane, Perth, Adelaide and Darwin housing prices are once again predicted to continue to record outperformance compared to our larger capital cities in 2026.

The three cities are tipped to record dwelling price rises of up to 16% according to forecasts released by SQM Research in its annual update, Christopher’s Housing Boom and Bust Report 2026. 

The base case forecast is for average national dwelling prices to rise between +6% to +10%.

This uptick in dwelling prices assumes:

• Population growth will likely moderate to about 390,000 people or 1.4%. This will translate into new demand for about 150,000 dwellings.

• Dwellings completions will rise to about 180,000 dwellings, creating a small surplus for the year of about 30,000 dwellings for next year.

• Interest rates will remain steady until mid-2026, thereafter, a 0.25% rate cut or two is probable.

• Employment growth will slow creating a further rise in unemployment to 5%.

SQM’s base case scenario assumes a steady but sluggish economy for 2026; yet one that carries the momentum of the housing prices growth recorded in the 2^nd half of 2025 until at least mid-way through to next year.

Thereafter predicted interest rate cuts for the 2^nd half of 2026 will ensure ongoing price growth.

If such rate cuts do not materialise, the market is still expected to record dwelling price rises in each capital city but at a slower pace of growth.

The interest rate cuts of 2025 plus the First Homeowner’s Deposit Scheme will continue to encourage buyers into the housing market.

Comment

2025 has been a year of resilience for the Australian property market, driven by strong population inflows and initial monetary policy easing; plus in recent months, the First Home Buyer Deposit Scheme.

However, as we look to 2026, the outlook is shaped by a range of potential economic paths, from a sluggish economy, which is our base case through to sticky inflation delaying rate relief to a global slowdown; or even a robust economic rebound is possible.

Our scenarios highlight the market's sensitivity to these factors, with Perth, Brisbane and Adelaide poised for double-digit growth in all cases due to their supply constraints and economic momentum.

About Louis Christopher Louis is recognised as one of Australia’s most respected and impartial research property analyst. He has extensive knowledge and experience of property and is regularly quoted in the media on his insights and is director of SQM Research.
Visit www.SQMResearch.com.au