Buyers Are Feeling Confident Again in Australia’s Housing Market

Australia’s housing market started 2026 with surprisingly strong confidence. Industry surveys show about 87% of property professionals expect prices to keep rising, reflecting a very upbeat mood. That optimism comes on the back of solid gains; national home values grew 8.6% in 2025, adding roughly $70K to the median dwelling. Most experts now forecast only mid-single digit growth this year, as rising interest rates and stretched budgets cool the pace slightly.

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Diverging State Trends Create Buyer Options

The upbeat national picture hides big local differences. Smaller states are leading the pack: Queensland, Western Australia and South Australia were cited as the most bullish markets heading into 2026. Those markets have enjoyed years of strong demand and tight rental markets, so many buyers are still active there. By contrast, Sydney and Melbourne are feeling the pinch. In NSW, high prices and tighter borrowing power mean confidence is growing only if rates stay low. Victoria is even softer, weighed down by higher taxes and investor selling. For buyers, this means location really matters: while competition is fiercest in booming Gold Coast, Brisbane and Perth, savvy buyers might find more room to negotiate in some NSW or Victorian suburbs where growth has already slowed.

First-Home Buyers and Competition at Thresholds

First-home buyers also shape the market. The expanded First Home Guarantee (5% deposit scheme) has unleashed a surge of activity at entry-level price points. More than 75% of agents reported a rise in buyer traffic after the scheme broadened, with intense competition for homes just below the program’s price caps. In practical terms, many suburbs that just fit under the guarantee limit now see bidding wars between hopeful new buyers. As a result, first-timers may get priced out of tight inner-city markets and instead look a bit further out or at more affordable locations. Conversely, buyers able to stretch their budget above those thresholds might face less competition, turning nearby suburbs into hidden opportunities.

Strategy Over Timing: Opportunity for Informed Buyers

Overall supply is only slowly improving, so the market remains tilted toward sellers. That means property values are unlikely to crash just because confidence is mixed. In this moderating market, strategy matters more than timing. A buyer’s agent can help you target pockets of affordability – for example, suburbs where new developments are easing stock pressures, or regions where modest growth means sellers may be more willing to negotiate. By zeroing in on local data (not just national headlines) we find areas where your bid carries extra weight. Waiting for interest rates to fall is risky; instead, now may be a good time to secure a solid home or investment property before prices potentially move higher.

As buyer’s agents at Prowealth Properties, we guide clients through exactly these challenges. We track state-by-state trends and the First Home Guarantee thresholds so you know where your money goes furthest. Ready to take advantage? Speak with our expert team to check your borrowing power and build your shortlist. Call us on 0433 853 248 or Contact Us for a free consultation. Follow Prowealth Properties on Instagram and LinkedIn for more market insights and tips – we’re here to help you buy with confidence in this changing market.