Every Australian property cycle throws up a moment where the forecasts diverge so sharply you wonder if the experts are looking at the same country. Right now is one of those moments. SQM Research sees capital city prices rising 6-10% nationally in 2026, with Perth and Brisbane pushing double digits. Commonwealth Bank tips a more modest 5% national gain. And at least one set of projections has prices dipping 2-8% through 2026-2027 before recovering. Here’s what you actually need to know.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
That spread — from single-digit national growth to double-digit city-level surges — isn’t noise. It reflects genuinely different views on how interest rates, migration, and housing supply will play out. But beneath the disagreement, a clearer picture emerges: the next boom is real, it’s concentrated in specific cities, and it’s being driven by forces that won’t disappear with one rate cut.
The Forecast Landscape: Three Views of 2026
You don’t need to pick one forecast and bet the house on it. But you do need to understand why they differ, because that tells you what to watch.
SQM Research, led by Louis Christopher, has been one of the most reliable forecasters over the past seven years. Their 2023 forecast of 4-8% for Perth was beaten by actual growth of 15.6%, and their 2024 prediction of 5-9% was surpassed by a 22% surge. For 2026, SQM’s base case sees every capital city growing, with a weighted average of 6-10% nationally. Perth and Darwin are tipped at 12-16%, Brisbane at 10-15%, Adelaide at 10-14%. Even Sydney and Melbourne, which SQM expected to dip slightly in their 2025 forecast, are now projected to rise 3-6% and 4-7% respectively.
Commonwealth Bank economists Trent Saunders and Belinda Allen take a more measured view: national growth of 5% in 2026, slowing to 3% in 2027. They see Perth at 15% and Brisbane at 12% — still strong, but they expect those markets to cool sharply after 2026 as higher rates and affordability constraints bite. CBA is notably bearish on Sydney (2%) and Melbourne (1%), citing affordability headwinds and higher construction levels in those cities.
Westpac sits somewhere in the middle. Matthew Hassan and Neha Sharma forecast Brisbane at 7% and Perth at 8% — roughly half the SQM numbers — but they’re more optimistic on Melbourne (4%) and Sydney (3%). Westpac’s key concern is that affordability constraints will “bite a little harder and earlier” than previously thought, especially after the RBA’s February 2026 rate hike.
All three agree on one thing: no capital city is expected to see prices go backwards over 2026-2027. That’s a notable consensus in itself.
City-by-City Outlook
→ Scroll right to see all columns
| City | SQM Research 2026 | CBA 2026 | Westpac 2026 |
|---|---|---|---|
| Perth | 12-16% | 15% | 8% |
| Brisbane | 10-15% | 12% | 7% |
| Adelaide | 10-14% | 9% | 6% |
| Darwin | 12-16% | — | — |
| Melbourne | 4-7% | 1% | 4% |
| Sydney | 3-6% | 2% | 3% |
| Canberra | 3-6% | — | — |
| Hobart | 4-7% | — | — |
The gap between SQM and the banks on Perth and Brisbane is the story of 2026. SQM sees supply shortages and economic momentum sustaining double-digit growth. The banks see the same tight supply but expect affordability to slam the brakes. Who’s right probably depends on how quickly construction actually ramps up — and on that front, the signs aren’t great.
What’s Driving the Next Boom
Three forces are pushing prices up, and none of them are temporary.
Population Growth Isn’t Slowing Enough
Australia’s population grew by roughly 390,000 people in 2026, or about 1.4%. That translates to demand for roughly 150,000 new dwellings. With completions expected at around 180,000, the surplus is about 30,000 homes — essentially zero in a market of this size. SQM Research notes that even if migration moderates, the structural deficit built up over years of under-building won’t disappear quickly.
Interest Rates Have Peaked
The RBA held the cash rate steady after its aggressive hiking cycle, and most forecasters expect cuts in the second half of 2026. SQM’s base case assumes one or two 0.25% cuts after mid-2026. Even a small reduction in mortgage rates meaningfully lifts borrowing capacity. Westpac notes that the rate outlook “materially changed” after the February 2026 hike, but the direction of travel is still toward easing.
Construction Can’t Keep Up
Builders are grappling with elevated material and labour costs, zoning delays, and land release challenges. The Australian Bureau of Statistics tracks building approvals well below the level needed to close the gap. Established homes become more attractive when building new carries the risk of delays and budget blowouts. That dynamic reinforces price growth in existing stock.
Reading the Signs in Your Suburb
National and even city-wide averages hide the real action. SQM Research founder Louis Christopher has consistently argued that granular data matters more than macro headlines. Here’s what to watch at the suburb level.
Vacancy Rates
A rate below 2% signals a tight market where tenants compete, rents rise, and investors take notice. Above 3% suggests oversupply and cooling demand. SQM Research publishes independent vacancy data that makes these shifts easy to track.
Days on Market
When properties sell in under 30 days on average, demand is intense and buyers need to act fast. Beyond 60 days, hesitation is creeping in — often a sign that the peak of the cycle has passed.
Future Supply Pipeline
Check council development applications and building approvals in your target suburb. A wave of new unit approvals in a small area can signal looming oversupply that will suppress yields and price growth. The opposite — tight approvals on constrained land — supports rising values.
Queensland’s southeast, particularly Brisbane, the Gold Coast, and the Sunshine Coast, shows some of the strongest combinations of these indicators. KPMG’s forecast of 10.9% house price growth for Brisbane in 2026 is powered by the Olympic infrastructure pipeline, Cross River Rail, and steady interstate arrivals. The Queensland Government Statistician’s Office projects continued population growth that supports this demand.
Common Traps to Avoid
Chasing National Headlines
By the time a suburb is named “top pick” on the evening news, the most profitable phase of its cycle is usually past. Buying at the peak of a boom story is how people end up in negative equity. The stronger approach: use local data to find suburbs early in their growth phase, before the media herd arrives.
Ignoring the Affordability Ceiling
Westpac describes Brisbane as “entering uncharted territory” with a battle between extremely tight supply and very stretched affordability. Even in a boom, prices can’t defy gravity forever. Markets where price-to-income ratios have blown out are more vulnerable to corrections when sentiment shifts.
Treating All Units the Same
KPMG expects units to gain around 7.1% nationally in 2026, close to houses at 7.7%. But that average hides a split: well-located, newer units in supply-constrained suburbs will outperform, while oversupplied towers in outer areas may stagnate. The tax rule changes coming in July 2027 also favour newer builds, making the age of the property a factor in your decision.
Timing the Market Instead of Time in the Market
Even professionals rarely nail the exact bottom. SQM’s Christopher, who has been more accurate than most, rates his own 2025 forecast at 7 out of 10. The safer bet: buy when you’re financially ready and the fundamentals of the suburb stack up. Time in the market consistently beats perfect timing.
Frequently Asked Questions
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Where the Cycle Actually Stands
The Australian property market isn’t one market. It’s thousands of local markets moving at different speeds. Right now, Perth, Brisbane, Adelaide, and Darwin are in an expansion phase with strong momentum. Sydney and Melbourne are closer to the peak of their cycles, with slower growth and more sensitivity to interest rates. Queensland’s southeast has a multi-year tailwind from Olympic infrastructure that most other cities can’t match.
The forecasts disagree on the exact numbers, but they converge on the big picture: the next boom is real, it’s concentrated in specific cities, and the underlying drivers — population growth, supply shortage, and eventual rate relief — are structural, not cyclical. The risk isn’t that the boom won’t happen. It’s that you’ll be looking at national averages while the real action passes you by.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read The Aussie Suburb Showdown: Hotspots Predicted to Boom in the Next 5 Years.
Sources and Further Reading
Beyond Suburbia: Exploring Alternative Living Options in Australia — A look at how shifting housing preferences could reshape demand patterns in the years ahead.
SQM Research (2025). 2026 Boom and Bust Report. 🔗
Commonwealth Bank (2026). Australian Housing Market Forecast. 🔗
Westpac (2026). Housing Pulse Forecast. 🔗
KPMG Australia (2026). Economic and Property Market Insights. 🔗
Reserve Bank of Australia (2026). Cash Rate and Monetary Policy. 🔗
Australian Bureau of Statistics (2026). Building Approvals Australia. 🔗
