Buyer demand drives upward trend in home prices
There’s no sign hot property markets will cool anytime soon
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An unexpected rebound in home prices across Australia’s biggest cities in the past few months shows no signs of slowing, with intense buyer demand driving another bumper weekend of auction activity.
An early start to the traditionally busy spring selling season has continued to strengthen and auction volumes on Saturday were up 12 percent on the previous week, according to data house CoreLogic.
“The volume of auctions has been rising through the second half of winter, with activity at the weekend up 27.8 percent from a month ago, and 22.1 percent higher than this time last year,” CoreLogic research team lead Duane Kaak said.
Even so, new for-sale listings remain well down on previous years, forcing a large pool of hopeful buyers to part with more cash to secure a home.
In Sydney, the weekend’s preliminary auction clearance rate is sitting at 73 per cent, with 305 successful sales from 419 results reported so far.
In Enmore in the city’s inner west, a pair of run-down neighbouring terraces on one title sparked a feeding frenzy among prospective buyers.
The successful bidder for 43 and 43a Edgeware Rd was 15 minutes late to the action but quickly made up for lost time, paying $1.918 million for the deceased estate. The sale price was well above the reserve of $1.4 million.
Meanwhile, a five-bedroom house at 4 Alsace Ave in Bardwell Valley in Sydney’s southwest fetched $2.15 million – some $550,000 above reserve, with five bidders battling it out.
Melbourne’s preliminary auction clearance rate of 68 per cent is based on 346 reported results from 704 scheduled sales.
A three-bedroom cottage at 10 Mckeon Ave at Pascoe Vale South in the northern suburbs drew strong interest, selling for $1.64 million – $190,000 above reserve.
It was the first time the retro wonder had come to market in 70 years.
Brisbane’s preliminary clearance rate of 59 per cent represents 17 sales from 29 reported results of a total 64 scheduled auctions on Saturday.
A prestige property at 41 Mayfield St in affluent Ascot fetched a whopping $4.03 million after swift bidding from nine parties.
Despite economic uncertainty, high interest rates and a cost-of-living crisis, high demand and low supply are putting upward pressure on property prices across the major capitals.
Home values across the country have recovered much of the declines seen throughout 2022, with a 2.79 per cent increase since December, according to the latest PropTrack Home Price Index.
“Interest rates were the primary driver of home price falls seen for much of 2022, but there are other factors – like the supply of properties for sale, labour market conditions, rate of immigration, home building, state of rental markets and interstate and regional migration –that also affect price growth, as well as how it is distributed across the country,” PropTracksenior economist Eleanor Creagh said.
In July, Sydney’s median home price rose 0.28 percent to $1.04 million and is 3.16 percent higher year-on-year.
Melbourne values remain flat, with a modest 0.01 per cent lift last month taking the median to $805,000, while in Brisbane, the median of $742,000 increased 0.37 per cent, up 1.98 per cent on July 2022.
“Although total stock on market has increased slightly, the flow of new listings has remained soft in recent months, leading to increased buyer competition and solid selling conditions with prices continuing to lift.”
The grand harbourside residence combines sweeping Sydney Heads views, resort-style entertaining and refined designer finishes with a reported $36 million price guide.
Rising rates, construction inflation and shrinking investor confidence are pushing Australia deeper into a dangerous housing spiral that monetary policy alone cannot fix.
Office rents in Sydney, Melbourne and Brisbane are climbing at their fastest pace since the pandemic as tenants compete for premium CBD space amid tightening supply.
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Australia’s major CBD office markets are recording some of their strongest rental growth since the pandemic, with businesses increasingly prioritising premium office space despite elevated geopolitical and economic uncertainty.
Knight Frank’s Australian Office Indicators Q1 2026 report found net effective rents in Sydney and Melbourne CBDs rose at their fastest annual pace since COVID-19, increasing 10.2 per cent and 6.8 per cent respectively over the 12 months to March.
Brisbane posted the strongest growth nationally, with net effective rents climbing 11.7 per cent over the same period.
The report points to a widening divide between prime CBD office towers and secondary office stock, as occupiers increasingly focus on quality, location and workplace amenity when making leasing decisions.
Knight Frank Senior Economist, Research & Consulting Alistair Read said demand remained heavily concentrated in premium assets within core CBD precincts, helping drive stronger rental growth in top-tier buildings.
“Occupier demand continues to be heavily concentrated in the most desirable CBD precincts and the highest-quality buildings, accelerating a sharp divergence between core and non-core markets,” Mr Read said.
According to the report, Sydney’s Core precinct and Melbourne’s Eastern Core significantly outperformed broader CBD markets over the past year.
“In Sydney’s Core precinct and Melbourne’s Eastern Core, net effective rents surged 14.3% and 16.1% over the past year, significantly outperforming the rest-of-CBD precincts,” Mr Read said.
The rental gap between prime and non-prime office locations has also continued to widen sharply.
“As a result, core CBD rents are now 54% higher than non-core locations in Sydney and 93% higher in Melbourne, highlighting the growing premium placed on amenity, accessibility and workplace quality,” he said.
Knight Frank said the strong rental growth across the major CBDs was being underpinned by a limited supply pipeline, with few new office developments expected to be delivered in the near term.
Mr Read said subdued construction activity was likely to support ongoing rental growth and tighter vacancy rates over the medium term, particularly for premium office towers.
“The combination of sustained demand and declining levels of new development will aid ongoing prime rental growth and lower vacancy rates over the medium term, particularly for best-in-class assets,” he said.
The report noted that current economic conditions were making new office developments increasingly difficult to justify financially.
“Economic rents remain well above expected market rents, making the construction of new office towers largely unviable, and concentrating tenant demand into existing buildings,” Mr Read said.
While suburban office markets generally remained subdued compared with CBDs, Melbourne’s Southbank precinct was identified as a relative outperformer, recording annual net effective rental growth of 2.7 per cent.
The report comes as broader Asia-Pacific office markets continue to stabilise following several years of disruption linked to hybrid work trends, inflation and rising interest rates.
Knight Frank’s separate Asia-Pacific Q1 2026 Office Highlights report found Sydney and Brisbane were among the strongest-performing office rental markets in the region, behind only Bengaluru and Tokyo for annual prime net face rental growth.
The Asia-Pacific report also found 18 of the 24 cities monitored across the region recorded stable or increasing rents in the first quarter of 2026, even as geopolitical uncertainty intensified following escalating conflict in the Middle East.
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