Revealed: Where property values will grow the most in 2026
Australia’s housing market is expected to keep rising in 2026, but new research shows growth will increasingly depend on postcode, not postcode averages.
3 min
Confidence across Australia’s housing market remains firm heading into 2026, but momentum is expected to diverge sharply by state as affordability ceilings, interest rate uncertainty and local supply constraints reshape conditions, according to new research from Cotality and a broad range of market forecasters.
Findings from Cotality’s Decoding 2026 report, based on responses from real estate agents and finance professionals nationwide, show 87% of respondents expect dwelling values to rise over the year ahead, while just 3.5% anticipate prices will fall.
Almost half forecast price growth of more than 5%, highlighting ongoing optimism following widespread gains through 2025.
That outlook broadly aligns with forecasts from major banks and property research groups, including ANZ, Domain, PropTrack and SQM Research, with the majority of forecasters expecting national home values to rise again in 2026, albeit at a more moderate and uneven pace than in recent years.
Cotality’s December Home Value Index recorded price growth across every capital city and regional market in 2025, with national dwelling values rising 8.6%, adding around $71,400 to the median home value.
Cotality Australia Research Director Tim Lawless said conditions softened toward the end of the year as affordability pressures intensified and expectations around interest rates shifted.
“Housing conditions were strong for most of 2025, which explains the broadly positive sentiment,” Lawless said.
“However, national averages mask increasingly wide variation at the local level, and it’s those differences that are becoming more important as affordability constraints and policy settings diverge.”
Smaller States tipped to outperform
Queensland, Western Australia and South Australia continue to stand out as the most positively viewed markets entering 2026, both among industry respondents and external forecasters.
Cotality survey results show 89% of Queensland respondents expect prices to rise, with more than half anticipating growth above 5%.
That optimism is echoed by forecasts from ANZ, Domain and SQM, which expect Queensland to remain one of the stronger-performing markets nationally, supported by population growth, tight rental conditions and ongoing housing shortages.
Western Australia also features prominently in forecasts, with SQM Research projecting some of the strongest percentage gains nationally, while Domain and ANZ expect Perth prices to continue rising, albeit at a steadier pace than in 2025.
Broad-based demand across price points and relatively affordable entry levels are expected to support further growth.
South Australia’s outlook remains underpinned by relative affordability and limited new supply. Most major forecasters expect Adelaide dwelling values to rise again in 2026, though generally at a more moderate pace compared with Queensland and Western Australia.
“Strong internal migration, tight rental markets and a persistent undersupply of housing continue to support these markets,” Lawless said.
“Those fundamentals largely remain in place, which helps explain why both agents and forecasters remain optimistic about price growth across much of the country outside the east coast’s largest cities.”
NSW and Victoria face tighter constraints
While sentiment in New South Wales remains positive, expectations are increasingly conditional. High dwelling values, stretched borrowing capacity and sensitivity to interest rate movements are expected to limit the pace of growth.
ANZ, Domain and PropTrack all forecast continued price increases in Sydney in 2026, though at a more moderate pace than recent years, reflecting affordability ceilings and rising listings.
Victoria continues to lag national performance after recording the weakest growth among the states in 2025. Although most forecasters still expect Melbourne home values to rise in 2026, expectations remain subdued relative to other capitals.
Higher property taxes, reduced investor participation and softer population growth continue to weigh on confidence, despite first home buyers accounting for a larger share of lending.
“Victoria stands out for the scale of investor selling, policy settings and higher holding costs, all of which have dampened activity,” Lawless said.
“While prices are still expected to trend higher, most forecasters see Victoria underperforming the national average again in 2026.”
First home buyer support lifts activity, but affordability bites
More than 75% of real estate agents reported increased activity following the expansion of the First Home Guarantee, with competition intensifying around scheme price thresholds.
Federal Treasury data shows more than 21,000 first home buyers have accessed the expanded 5% deposit scheme since October*.
However, affordability remains a key constraint, with fewer than half of Australian suburbs now priced below First Home Guarantee caps, a sharp decline from a year earlier.
Confidence holds, but risks are building
While expectations for price growth remain broadly positive across most forecasts, confidence is becoming more conditional as affordability ceilings, interest rate uncertainty and uneven regional dynamics shape the outlook.
“The market enters 2026 from a position of strength, and the majority of forecasters still expect dwelling values to rise,” Lawless said.
“However, affordability challenges, interest rate uncertainty and policy settings are likely to cap the pace of growth, particularly in higher-priced markets.
“With no material supply response expected in 2026, tight housing conditions should help offset downside risks, but outcomes will increasingly depend on local market dynamics rather than national trends.”
Rising rates, construction inflation and shrinking investor confidence are pushing Australia deeper into a dangerous housing spiral that monetary policy alone cannot fix.
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Kit Braden, an executive at French beauty empire L’Occitane, has spent every winter for the past 13 years at the stone vacation home.
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A historic Barbados estate with a 300-year-old villa and 11 acres overlooking the Caribbean Sea is now for sale with a guide price of $22.5 million.
The seller is Kit Braden, chairman of the U.K. branch of French beauty empire L’Occitane Group, whose family has spent every winter for the last 13 years at the island property, known as Fustic Estate.
“It’s very much a family house,” Braden said. “We love having a lot of people there. It’s a collection point to keep everyone together.”
The main villa dates to 1712, though it’s been reimagined and expanded substantially over the years.
It spans 13,000 square feet and features seven en suite bedrooms across three wings, as well as expansive verandas, stone courtyards and rows of louvered doors in gay Caribbean pastels.
In the 1970s, when the home was owned by Charles Graves—brother of British poet Robert Graves—it was reimagined by stage designer Oliver Messel, one of the foremost theater designers of the last century. Messel expanded the home, added a lagoon pool with a natural waterfall and other theatrical features, according to Braden.
“The whole place is a little bit magical,” he said.
The home sits about 350 feet above the water, and surrounded by lush gardens that slope towards the water.
“We look down through our garden—which is about 12 acres of tropical gardens and palm trees and wonderful old mahogany trees—onto the Caribbean,” Braden said.
He and his wife first saw the property on New Year’s Eve 2013, during a quick trip from where they were staying in Grenada.
The couple spent an hour walking the perimeter, some of it still untouched jungle, in the pouring rain.
“By the time we got back, I had fallen in love with it,” Braden said.
His wife, however, wasn’t so sure. But in Braden’s telling, a second visit in sunnier weather with two of their children brought her around.
“She had to be talked into that it was a jolly good idea; now she absolutely loves it,” he said.
When they bought the property, the edge that runs along the waterfront was a jungle, so they cleared the ridge and transformed it into gardens.
They also bought an additional sea-level parcel with two beach cottages, giving the property direct access to the water and the town below via a five-minute walk.
The property also has a 15-person staff, a reflecting pond, an outdoor pavilion suitable for yoga and a commercial grade kitchen that can serve more than 100 guests, according to a brochure from Knight Frank, which posted the listing in March. They did not provide further comment.
For Braden, the property is special because of its natural beauty, its proximity to the town of Saint Lucy and its history—which dates way way back to when the island of Barbados was first formed via tectonic activity.
“It was basically tectonic plates that collided about a million years ago so the seabed is the top of the hill,” Braden said. “We’re on coral rock.”
As a result, Fustic Estate includes an extensive network of caves that were likely used by the Arawaks, a Venezuelan fishing tribe that followed the fish to these islands about a thousand years ago.
“If the fish were good they’d camp here,” Braden said. “There’s evidence that they stayed there in those caves, they lived there in good winters.”
Now it’s someone else’s turn to live on the land shared by Arawaks, the plantation owners of 1712, Charles Graves and the Braden brood.
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