[PODCAST] Domain’s 2027 Property Forecast: Which Markets Set to Rise and Fall with Dr Nicola Powell

Australia’s property market has changed gears again.

For the last few years, we’ve had a market driven by strong population growth, a chronic shortage of homes, tight rental markets and buyers who were desperate to get in before prices moved further away from them.

But according to Domain’s latest FY2027 Forecast Report, we’re now entering a very different phase.

Sydney and Melbourne house prices are forecast to fall over the next year, and Canberra is also expected to soften.

At the same time, Brisbane, Adelaide and Perth are still forecast to grow, although at a much slower pace than we’ve seen over the last couple of years.

And interestingly, Domain expects units to outperform houses in many of our capital cities as affordability pressures reshape the way Australians buy property.

Now, I know some people will hear this and think, “Here we go again, the market is about to fall.” But that’s not the way I see it.

This is not one national property market moving in one direction. It is a collection of very different markets, at different stages of their cycles, being influenced by interest rates, borrowing capacity, supply shortages, buyer confidence and changing investor behaviour.

And for property investors, that distinction matters.

Because averages can be misleading. Headlines can be dangerous. And forecasts are useful only if you understand the assumptions behind them.

Today I chat with Dr Nicola Powell about Australia’s property market and the latest Domain forecast.

We unpack why the market is fragmenting across capital cities and what that means for buyers and investors.

We look at how interest rates, borrowing capacity, and rising supply are changing market conditions.

We discuss why houses and units are now moving in different directions, especially in Sydney and Melbourne.

We explore why long-term investors should focus on cycles, location, and strategy rather than short-term headlines.

Takeaways

• Australia’s property market is fragmenting, with each capital city following different conditions.
• Higher interest rates have reduced borrowing capacity and cooled buyer urgency.
• Sydney and Melbourne are more sensitive to rate changes because prices are already high.
• Rising supply is shifting negotiating power toward buyers in several markets.
• Price downturns are usually shorter and milder than the growth phases before them.
• Undersupply and construction costs continue to support medium-term property values.
• Units are expected to outperform houses as affordability pressures intensify.
• Well-located, owner-occupier-style apartments usually hold up better than investor stock.
• Brisbane’s rapid growth has pushed unit prices toward Sydney-level territory.
• Long-term success comes from patience, quality buying, and riding market cycles.

Links and Resources:

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Dr Nicola Powell - Chief of Research & Economics for Domain:

Domain’s FY27 Forecast Report

Domain’s Property Cycle Report

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