Australian housing market update | April 2026

Key takeaways

The national market rose 0.7% in March, but growth is cooling from the peaks of late 2025 as high interest rates and cost-of-living pressures begin to bite.

A major city-level split is occurring, with Perth's values surging 7.3% over the quarter while Sydney and Melbourne values have officially entered a mild decline.

The "affordability gap" is driving demand to the bottom end of the market, where lower-quartile properties are outperforming premium homes in almost every capital city.

The national housing market recorded a 0.7% rise in March, taking the quarterly growth to 2.1%.

While values continue to trend higher, the pace of appreciation is gradually losing steam compared to the 2.8% lift seen in the final quarter of last year.

This national average, however, masks a significant and growing divergence between the major capital cities and different price points.

Market conditions are becoming increasingly uneven. While mid-sized capitals like Perth and Brisbane continue to surge, the larger markets of Sydney and Melbourne are entering the early stages of a downturn.

This segmentation is also evident across value tiers, with the more affordable lower quartile consistently outperforming the premium end of the market across most jurisdictions.

National Market Performance

The performance gap between cities has reached extreme levels, with Perth's quarterly growth outstripping Melbourne's by a significant margin.

Affordability and supply levels remain the primary determinants of these contrasting results.

Source: Cotality, April 2026

Affordability and Serviceability Constraints

The primary challenge facing the national market is a worsening mix of record-low affordability and high serviceability hurdles.

With mortgage rates remaining elevated, borrowers effectively need to prove they can service loans at approximately 9% when factoring in current buffers.

Note: This "affordability ceiling" is shrinking the pool of buyers, particularly at the premium end.

For example, in Sydney, upper quartile values fell by 2.4% over the past three months, while the lower quartile rose by 1.8%.

This reflects a defensive shift toward more affordable stock by first-home buyers and investors who are less impacted by the serviceability assessments required for larger loans.

Supply Dynamics and Future Outlook

Supply remains a key stabilizer but is also increasingly fragmented.

In Perth, advertised listings are tracking 40% below the five-year average, fueling urgency. Conversely, in Sydney and Melbourne, stock levels are lifting above averages, shifting the balance of power toward buyers.

Source: Cotality, April 2026

The outlook for the remainder of 2026 is cautious. While a strong labor market prevents a sharp correction, geopolitical risks and interest rate uncertainty are weighing on consumer sentiment.

Growth is expected to remain uneven, with the most affordable segments likely to show the most resilience as demand concentrates where serviceability remains viable.

Tight supply and high employment should provide support, but broad-based gains are likely to remain limited in the near term.

About Tim Lawless Tim is Research Director at Cotality (formerly CoreLogic), analysing real estate markets, demographics and economic trends across Australia. Visit www.corelogic.com.au