Ray White Group Chief Economist, Nerida Conisbee, said the market has already returned to double-digit annual growth ahead of schedule, driven by fundamental supply-demand imbalances and renewed confidence in major capital cities.
“The Australian housing market heads into 2026 with far more momentum than most expected a year ago, but also with an unusual degree of uncertainty,” Ms Conisbee said.
“Whether this pace can be sustained into next year will depend heavily on the interest-rate path, now looking less likely, and the speed at which construction costs continue to moderate.”
Ms Conisbee noted that the recovery has broadened significantly beyond early outperforming markets, with previously lagging cities now showing strong growth.
“Melbourne and Darwin, both slow to join the upswing, are now firmly back in growth territory,” she said.
“Melbourne has finally surpassed its previous peak, supported by improving affordability and returning population flows, while Darwin’s sharp rebound reflects a chronic shortage of listings and high investor demand.”
Premium markets have made a notable comeback according to Ms Conisbee, particularly in Sydney where high-end suburbs are showing meaningful price gains after several years of absence from national growth rankings.
“Perth continues its extraordinary run, with suburbs such as Cottesloe-Claremont leading national dollar-value growth for a second year, underpinned by population inflows and the strength of Western Australia’s economy,” she said.
“Brisbane remains one of the most consistent performers across inner-city markets.”
Lifestyle markets continue to thrive, with the Gold Coast emerging as a standout performer in the current cycle.
“Nowhere is this clearer than the Gold Coast, where unit prices have climbed so rapidly that they now sit above Sydney’s,” Ms Conisbee said.
“Strong migration, investor activity and a wave of high-end coastal development have pushed prices into territory that would have seemed implausible only a few years ago.”
She pointed out that despite construction costs easing from their peaks, new supply remains constrained, suggesting the region will likely stay undersupplied well into 2026.
The affordable segment of the market is expected to be among the strongest performers through 2026, bolstered by government initiatives.
“The affordable end of the market is also set to remain one of the strongest performers through 2026, supported by the now-expanded five per cent deposit scheme,” Ms Conisbee said.
“The removal of income caps and the lift in price thresholds have dramatically broadened eligibility and lowered upfront costs for first home buyers.”
She said that demand is already flowing into the bottom quartile, where affordable houses and units are consistently outpacing the wider market across most cities.
“In places such as regional Queensland, affordable homes are recording annual growth as high as 13.8 per cent, underscoring the intense competition created when incentives collide with limited supply,” she said.
According to Ms Conisbee, the timing of interest rate cuts remains the biggest uncertainty for the market outlook.
“Labour-market strength has complicated the outlook, delaying expectations of the first move even as other parts of the economy soften,” she said.
“The most decisive shift is occurring in the construction sector, where cooling activity, shrinking pipelines and easing wage pressures suggest a major inflation driver is unwinding.”
Despite these variables, Ms Conisbee remains optimistic about the market’s trajectory while expecting a moderation from current growth rates.
“Taken together, the fundamentals still point to another year of solid, but more moderate growth. We are likely to move beyond the double-digit phase by mid-2026 unless a rate cut arrives earlier than expected,” she said.
“If it does, the combination of lower borrowing costs, improving construction conditions and persistent supply shortages could easily re-accelerate prices. Without one, the market will continue to grow, just at a steadier and more sustainable pace.”
