Australia’s residential property market is under “sustained pressure from both sides”, experiencing a sharp expansion in housing costs alongside a severe contraction in rental availability, according to the Real Estate Institute of Australia’s (REIA) Real Estate Market Facts report for the March quarter 2026.
Data released on June 17, 2026, reveals that the national median house price rose by 2.2% over the quarter to reach $1,146,864.
This milestone caps off a 12.0% increase over the past year, marking the highest annual growth recorded since March 2022.
“The national median house price increased 2.2% over the quarter to $1,146,864, representing the highest annual increase of 12.0% since March 2022,” said REIA President Jacob Caine.
“Darwin, Perth and Brisbane led quarterly gains, while Sydney, despite a modest quarterly decline of 0.6%, remains the most expensive city in the country at a median house price of $1,550,000, which is 35.2% above the national median.”
The quarterly gains for house prices across the leading capital cities reached 7.1% in Darwin, 5.3% in Perth, and 5.1% in Brisbane.
The apartments and townhouses sector posted an annual increase of 9.0% nationally, the highest annual spike for the sector since June 2014. Quarterly price expansions for other dwellings were led by Adelaide (6.6%), Brisbane (5.4%), and Perth (5.4%).
According to Mr Caine, these figures represent an underlying real estate ecosystem “driven by persistent demand and structurally inadequate supply, a combination that continues to place upward pressure on both purchase prices and rents across the country.”
Rental markets locked in supply crunch
The strain on purchasing is directly mirroring a severe supply crunch in the leasing market. The national weighted rental vacancy rate fell to 1.7% over the March quarter, dropping well below the 3.0% industry standard required for a balanced market.
Conditions have grown particularly severe in Brisbane and Adelaide, where rental vacancy rates plummeted to a microscopic 0.7%.
This depletion of available listings caused national median rents for three-bedroom houses to rise 2.0% over the quarter to $643 per week.
For two-bedroom other dwellings, weekly median rents jumped 3.7% to $674, with capital city hikes ranging from a 1.7% increase in Melbourne to a 5.3% spike in Sydney.
Mr Caine said that current outcomes present a scenario where “rental conditions [are] tightening at a pace that is leaving tenants with fewer options and higher costs.”
Tax policy warnings trigger friction
The REIA has tied these findings directly to broader macroeconomic policy disputes.
Mr Caine warned that the current numbers must be assessed alongside independent modeling from the 2026–27 Federal Budget, which indicates that proposed structural changes to negative gearing and capital gains tax (CGT) concessions could push rental costs up by an additional $9 per week over the next four years.
“In a market where vacancy rates are already at crisis levels, and rents are rising every quarter, the last thing tenants need is policy that reduces the incentive for private investors to provide rental housing.
“Private investors supply the overwhelming majority of Australia’s rental stock,” he said.
“Reducing the tax competitiveness of residential property investment in a supply-constrained market will reduce the number of properties available to rent, drive vacancy rates lower still, and push rents higher.”
With population growth remaining robust and new residential construction continuing to lag behind immediate demand, the peak body concludes that the fundamental imbalances destabilising the Australian property sector will not resolve without “deliberate and coordinated policy action” focused entirely on encouraging stable private investment and building more homes.
Fact Sheet: March Quarter 2026 Data
National Median Sale Prices & Capital City Changes:
- National Median House Price: $1,146,864 (+2.2% quarterly change, +12.0% annual change)
- Sydney Median House Price: $1,550,000 (-0.6% quarterly change, +6.9% annual change)
- Melbourne Median House Price: $991,500 (+1.9% quarterly change, +7.2% annual change)
- Brisbane Median House Price: $1,140,000 (+5.1% quarterly change, +23.2% annual change)
- Adelaide Median House Price: $970,000 (+4.9% quarterly change, +14.5% annual change)
- Perth Median House Price: $990,000 (+5.3% quarterly change, +23.8% annual change)
- Canberra Median House Price: $1,055,000 (+3.4% quarterly change, +7.9% annual change)
- Hobart Median House Price: $770,000 (+0.7% quarterly change, +4.8% annual change)
- Darwin Median House Price: $717,500 (+7.1% quarterly change, +27.7% annual change)
- National Median Other Dwelling Price: $757,652 (+1.1% quarterly change, +9.0% annual change)
Rental Vacancy Rates by Capital City:
- National Weighted Average: 1.7%
- Brisbane: 0.7%
- Adelaide: 0.7%
- Canberra: 1.2%
- Hobart: 1.2%
- Sydney: 1.8%
- Perth: 2.0%
- Darwin: 2.0%
- Melbourne: 2.5%