Australian property values are forecast to reach new record highs across all capital cities by the end of 2026, driven by easing interest rates, strong first-home buyer activity and continued affordability pressures.
According to Domain’s latest outlook, first-home buyers are expected to play a major role in early 2026, with the expanded First Home Guarantee Scheme accelerating demand and creating momentum across key markets.
Sydney house prices are projected to rise by around 7%, pushing the median toward $1.92 million, while Melbourne is expected to see renewed growth, with median house prices forecast to lift by approximately $87,000 to around $1.17 million. Canberra is also tipped to approach previous peak levels near $1.18 million.
More moderate growth of 4-5% is forecast for Brisbane, Adelaide and Perth, with unit prices expected to outperform houses as buyers increasingly prioritise affordability.
Domain’s research suggests the extension of the First Home Guarantee Scheme alone could lift prices by up to 6.6% in its first year - a stimulus effect comparable to several interest rate cuts.
For investors, conditions are expected to remain supportive in the first half of 2026, underpinned by solid rental yields and early capital growth. However, as new housing supply gradually comes online, price growth may moderate later in the year.
Rental markets are also set to remain tight, with combined capital city rents forecast to rise by around 3%, and even higher increases of up to 4% in Brisbane, Adelaide and Perth due to ongoing supply shortages.
What this means for your finance strategy:
With price growth, policy changes and lending conditions all shifting at once, having the right finance structure and lender strategy has never been more important.
We help buyers and investors navigate:
- First-home buyer schemes and eligibility
- Lending policy differences between banks and non-banks
- Structuring for investors to maximise borrowing capacity
- Refinancing strategies to improve cash flow and serviceability
- Pre-approvals to move quickly in competitive markets
Whether you’re buying your first home, upgrading, or investing, securing the right finance can be the difference between winning a property - or missing out.
Speak to the Rethink Financing team to ensure your finance strategy is aligned with the opportunities ahead in 2026.
