When introducing the 2026 Marshall White Prestige Property Index, the company’s group sales director, John Bongiorno, said he had high hopes for the luxury real estate market.

This positive outlook may have influenced his decision to sell his own home, Musk Ridge Farm. The 8ha Mornington Peninsula property has come to market with a price guide of $9 million to $9.5 million.

“Looking ahead, international influences are likely to remain an important factor shaping Melbourne’s prestige market throughout 2026,” he wrote.

“Australia’s reputation as a stable and desirable place to live will continue to attract strong interest from expatriate buyers returning home, and we are already seeing an increase in enquiries from this group, particularly for properties in Melbourne’s most established school zones and blue-chip suburbs.”

No doubt the company director expects demand to extend into regional Victoria. His

Flinders estate, which has pastoral and bushland views to the waters of Westernport and Phillip Island, last traded in 2017 for $4 million.

Its 2026 price guide is in line with other recent Flinders transactions. In late 2025, 2275 Mornington Flinders Rd sold for about $8.75 million, and 88 King St sold for $12.25 million.

Bongiorno’s landmark peninsula property was designed by architect Stephen Akehurst to create a coast-meets-country lifestyle estate for avid entertainers or weekend guest retreats.

The private seven-bedroom, eight-bathroom residence features manicured English-style gardens, a self-cleaning mosaic-tiled pool and spa, converted stable guest quarters, a separate games room with bar, a barbecue pavilion, and a self-contained manager’s cottage.

With more than four decades of prestige-market experience, Bongiorno says the same guidance he gives clients has shaped his own property decisions: desirable locations and long-term lifestyle appeal will sustain high demand.

“Regardless of market conditions, quality real estate fundamentals remain the most important consideration. For me, that has always been about location, quality of construction and a home’s ability to stand the test of time,” Bongiorno says.

“Homes that consistently perform over the long term are those positioned in tightly-held locations with genuine lifestyle appeal and quality design that will remain relevant for years to come.”

His Hamptons-style homestead features spacious interiors and designer elements, including a large entry foyer, American Oak floors, high ceilings, and multiple French doors opening onto patios and terraces. Modern amenities include hydronic heating, integrated cooling, smart home technology, and CCTV security.

The palatial main living zone is bookended by twin open fireplaces and crowned by a central iron-ring chandelier. A glass conservatory dining area captures the natural backdrop, and a quartz stone kitchen features a big island bench, Bertazzoni appliances, a butler’s pantry, a SubZero fridge/freezer, and two Vintec wine fridges.

Off the kitchen, there is also a mudroom, a powder room, a bathroom, and a commercial-grade laundry.

The ground-floor main bedroom suite includes two walk-through wardrobes, a shower ensuite, a fireplace, and access to the wraparound veranda. Upstairs, there are two additional bedrooms with en-suites and built-in wardrobes, along with a study area.

Outside, beyond the pool terrace and barbecue pavilion, the grounds feature fenced paddocks, a spring-fed dam, an automatic front gate, a machinery shed, a double garage, plus multiple driveway parking bays.

Bordered by the Main Ridge Nature Conservation Reserve and Manton Creek, Musk Ridge Farm is close to Red Hill and Flinders townships, and is surrounded by world-class wineries, golf courses, and the peninsula’s popular beaches.

Capital city home prices have continued to rise in April despite higher interest rates and ongoing uncertainty about the outlook for inflation and the global economy. 

Growth rates, however, have eased, reflecting the usual subduing effect of the lengthy April holiday month.

The national capital city median house price increased marginally by 0.2% over the April quarter to $1,297,798 compared to the March quarter, according to the latest data from My Housing Market.

Annual national house prices are, however, 10.2% higher and have now increased for 14 consecutive months.

Most capitals reported house price increases over the month, with Brisbane and Perth the top performers, each higher by 1.3%, followed by Hobart and Darwin, both up 1.2%, Adelaide up 0.2%, with Sydney steady. Melbourne prices, however, fell 0.7%, while Canberra prices fell 1.7%.

Most also report strong annual house price growth in excess of 10%, with Perth, Darwin, Brisbane, and Adelaide clearly the highest, up by 25.7%, 21.6%, 20.0% and 14.2% respectively.

National unit prices were also higher in the April quarter than in the March quarter, rising by 0.5% to $728,459, and have now increased by 8.2% compared to the April quarter 2025 result.

Brisbane was the top monthly performer in April, with unit prices rising by 1.7%, followed by Perth up 1.0%, Melbourne and Canberra each up 0.9%, Adelaide up 0.6%, and Hobart up 0.1%. Sydney unit prices were steady over the month; however, Darwin unit prices were down 0.8%.

Similar to houses, Perth, Brisbane, Adelaide and Darwin continue to record the highest annual unit price growth to April 2026, at 30.1%, 27.8%, 12.9% and 11.8%, respectively.

Analysis

Capital city housing markets have generally reported higher home prices in April, although growth rates have eased compared to March. 

Easing housing markets reflect the usual dampening effects of the lengthy April holiday month, although higher interest rates and increased uncertainty about the economic outlook have weighed on affordability and confidence.

Robust annual home price growth, however, continues for most capitals with Perth, Darwin, Brisbane, and Adelaide still reporting boomtime results.

Although 2026 is still set to see home price growth generally in most capitals, the rising spectre of further interest rate increases and elevated uncertainty over the outlook for inflation and the economy will continue to dampen affordability and confidence. 

Brisbane, Adelaide, Perth and Darwin, however, are again set to lead capital city outcomes for both houses and units, but are unlikely to match the extraordinary 2025 results.

Brisbane, Perth and Adelaide continue to record higher median house prices than Melbourne, with Perth now closing in fast on Brisbane and set to lead all but Sydney.

Underlying drivers will continue to support overall housing market activity, although the outlook for RBA interest rates is more problematic, with inflation set to accelerate and economic activity to decline as a consequence of the recent sharp increase in oil prices.

The economy, however, remains strong, with a steady, still-low jobless rate, falling unemployment, continued robust job growth, and a high participation rate.

Housing demand continues to outpace a low and diminishing housing supply, and although high post-COVID migration levels have recently eased, numbers remain strong and will add to chronic housing undersupply, supporting high rents and low vacancy rates generally in capital city rental markets. 

Following a period of easing in rental growth, the latest data continue to show extraordinarily low home rental vacancy rates and clear signs that rents are on the rise again.

High rents and higher prices continue to provide clear incentives for first-home buyers and investors chasing solid investment returns. 

Ongoing government initiatives to support first-home buyers will increase demand and place further upward pressure on prices.

Capital city housing markets generally recorded higher house and unit prices over 2023, 2024 and surged over 2025, fuelled by rising buyer and seller confidence through sharp cuts to interest rates.

Although 2026 is again likely to see higher home prices, significant uncertainty has recently emerged about the near-term outlook for already-high interest rates and economic activity, which will generally dampen buyer and seller confidence.

Early signs are emerging in the recent weakening of home auction market clearance rates, particularly in Sydney and Melbourne.

Queensland’s Paddington has a new benchmark.

The Brisbane suburb’s residential price record has been reset following the sale of ‘Governess’, a landmark 1860s-era home reimagined by local builder-developer GRAYA.

The five-bedroom residence at 49 Reading Street has transacted for more than $12 million, the highest price achieved in the tightly held inner-Brisbane suburb, underlining continued strength at the top end of the market.

GRAYA, led by brothers Rob and Andrew Gray, has built a reputation for delivering design-led homes and boutique residential projects, but ‘Governess’ represents one of its most ambitious undertakings to date, both in scale and execution.

The home was marketed by Ray White Collective’s Matt Lancashire and Josh Brown, who said the result reflects both the quality of the product and the depth of demand for premium homes in established suburbs.

“Governess is an absolute showstopper,” Lancashire said.

“It’s easily one of the most significant and meticulously transformed character homes ever to hit the Brisbane market, and the record result reflects exactly that.”

Brown said the sale reinforced a consistent trend emerging across Brisbane’s prestige market.

“To achieve a result like this in Paddington proves there is still an incredible appetite for ultra-premium, character-rich homes when they are executed flawlessly,” he said.

For much of the past year, the home has been a point of local intrigue. During its transformation, it drew regular attention from passersby along Reading Street, a reflection of both the scale of the site and the prominence of the build. 

Set on a 1,634 sqm corner parcel, ‘Governess’ sits elevated above the surrounding streetscape, capturing sweeping city and ridgeline views. The position alone places it among a limited pool of homes capable of achieving outcomes at this level.

What distinguishes the project, however, is not just the site, but how the existing home has been reworked.

Rather than a conventional renovation, GRAYA has undertaken a full-scale reinterpretation of the original 1860s residence, retaining its heritage elements while introducing a contemporary extension that reshapes how the home is used.

The transition between old and new is anchored by a central spiral staircase, which acts as both a functional connection point and a defining architectural feature. It separates the more traditional elements of the home from the contemporary addition, creating a clear but cohesive distinction between the two.

Internally, the material palette has been carefully considered to reflect the surrounding environment. Green marble and walnut-toned cabinetry echo the leafy outlook, while large expanses of glazing bring in natural light and frame the elevated views.

Ceiling heights of 3.1 metres and floor-to-ceiling glass reinforce that sense of openness, allowing the home to operate across both indoor and outdoor zones. Living and dining areas extend to a wraparound deck overlooking landscaped lawns and a resort-style pool, positioning the home as much for entertaining as it is for day-to-day living.

The kitchen has been designed as a central hub, anchored by a 4.5-metre island beneath a skylight and supported by a concealed butler’s pantry. Outdoor entertaining is equally integrated, with an alfresco BBQ area connecting directly to the main living spaces.

Below, additional amenity spaces reflect the growing expectation for lifestyle-driven design at this level of the market. A gym and tasting room, complete with cellar, bar and lounge, sit behind thermally insulated glass, providing dedicated zones for both recreation and entertaining.

Accommodation is spread across five bedrooms, alongside a study and additional office space. The primary suite occupies the uppermost level, functioning as a self-contained retreat with its own lounge, private deck, dressing room and ensuite.

The inclusion of features such as an internal lift, home automation via Electronic Living, and a five-car garage reinforce the level of specification.

The sale highlights the continued evolution of Brisbane’s prestige housing market.

Suburbs like Paddington, long defined by their character housing and proximity to the CBD, are increasingly seeing a new layer of product emerge. Rather than incremental renovations, developers are delivering full-scale transformations that position heritage homes at the very top of the market.

The former Paddington record was set in early 2025 when a newly built home, ‘Mascotte’, on Garfield Drive, sold for $11.8 million.

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.

The Reserve Bank had little choice but to raise interest rates again this week.

Inflation was already proving stubborn before the latest Middle East instability added further pressure to energy prices and supply chains. 

Housing inflation alone has averaged six per cent over the past year, remaining one of the single biggest contributors to CPI.

But while the focus remains on rates, the deeper problem is structural and far more dangerous.

Australia is not building enough homes, and the conditions required to fix that are deteriorating simultaneously.

Construction costs remain elevated. Builders are increasingly unwilling to absorb contract risk. Labour shortages persist. 

Capital is becoming more expensive. And as borrowing capacity weakens and sentiment softens, fewer projects are becoming financially viable.

The result is a self-reinforcing cycle.

The RBA raises rates to fight inflation. Higher rates reduce development feasibility. Fewer projects start. Housing supply tightens further. Rents rise. Inflation persists. The RBA raises rates again.

The only long-term solution is supply, yet Australia remains nowhere near the National Housing Accord target of 240,000 new dwellings a year. 

Completion continues to lag approvals, meaning many projects approved on paper are simply never making it out of the ground.

That gap matters enormously because housing is not just another sector of the economy. 

Around two-thirds of Australian household wealth is tied to property, while the sector underpins millions of jobs and related industries. Weakness here quickly spreads beyond real estate.

We are already seeing signs of stress. Auction clearance rates in Sydney and Melbourne have softened, borrowing capacity has declined, and parts of the market are experiencing price corrections as confidence weakens.

At the same time, policymakers continue to debate tax measures such as changes to negative gearing and capital gains tax discounts, despite fears that such reforms could drive private capital out of the rental market at precisely the moment when supply is most constrained.

This is the paradox at the centre of Australia’s housing crisis.

Demand for property remains extraordinarily high, yet the economic conditions required to actually build new housing are worsening.

The Reserve Bank cannot solve that problem alone. 

Monetary policy cannot accelerate planning approvals, reduce construction costs or create more tradies. It can only raise the cost of money until something eventually breaks.

And increasingly, that “something” looks like the development pipeline itself.

Paul Miron is the Co-Founder & Fund Manager of Msquared Capital.