Rising Property Prices in 2026 and the Challenge for Buyers

Australia's real estate market reached an all-time high at the end of 2025, with home values increasing across multiple capitals as demand remained strong and competition among buyers intensified. Combined capital city home prices jumped about 9.6% for the year, marking the 12th straight quarter of growth. That means buyers are facing tighter conditions, higher budgets, and less room for error. All capitals except Canberra and Hobart hit record highs, and six now have median house prices above $1 million.

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Perth was a standout. Its median house price surged 9.9% in the December quarter, pushing the city past the $1 million threshold for the first time. This lifted Perth’s median to about $1.09M, joining Sydney, Melbourne, Brisbane, Adelaide and Canberra in the “million-dollar club”. Melbourne also rebounded strongly, with its median reaching $1.11M (up 7.4% year-on-year) after years of stagnation. Brisbane and Adelaide recorded double-digit annual gains, highlighting how tight supply continues to drive house prices higher across multiple markets.

Tight Supply, Local Demand, and Affordability Pressures

Tight supply and strong local demand remain the main drivers of price growth. Domain reports that smaller capitals such as Brisbane, Adelaide, Perth and Darwin are leading the upswing. However, growth is not uniform. Affordability pressures are forcing buyers to reassess where and what they can buy, meaning headline city averages often hide sharp differences between suburbs. This makes research and local market knowledge more important than ever.

As house prices stretch budgets, many buyers are being pushed to reconsider property type, not by preference, but by necessity. In several capital cities, unit prices have risen faster than house prices in recent quarters as buyers look for more affordable entry points after being priced out of standalone homes.

Brisbane is a clear example. Unit prices climbed 8.1% in Q4 (19.3% for the year) to a median of around $770,000. The above information shows that the pressure of affordability may influence buyer preferences, as the gap between house and unit prices continues to grow. For example, in Brisbane, the average price of a home is now approximately 52% more than the average price of a unit. In addition, the price differences between homes and units are even greater in both Adelaide and Perth.

Key Considerations for Buyers Right Now

• Intense competition: Rising prices and limited supply mean auctions are fiercely contested. Even small price movements can decide outcomes. A buyer’s agent can help with bidding strategy and timing.
  
  

• Shrinking affordability: Even traditionally affordable markets are heating up. Darwin, for example, saw its median jump 22% in 2025. Entry-level opportunities are becoming harder to find.
  
  

• Houses remain the benchmark: Detached homes continue to attract strong demand and higher premiums. Units are increasingly viewed as a fallback option for buyers who are priced out of houses, rather than a first choice.
  
  

• Local knowledge matters: City-wide figures hide big differences at the suburb level. Some areas are outperforming others, so detailed local research is critical.
  
  

• Every month counts: Prices are moving quickly. Brisbane’s median rose by more than $50,000 in just one quarter. Delays can materially change what buyers can afford.
  
  

• Plan, don’t panic: Being finance-ready with a clear strategy allows buyers to act decisively. In fast-moving markets, preparation matters more than speed alone.
  
  

Ready to navigate these trends? Prowealth Properties is here to help. Call us at +61 433 853 248, and you can also book a free consultation with our buyer’s agents. Follow Prowealth Properties on Instagram and LinkedIn for more insights.