As we enter 2026, the real estate market continues to produce outstanding results for sellers and investors despite buyer disappointment at the Reserve Bank of Australia’s decision to not cut interest rates for a fourth time in less than 12 months.
The average value of a home rose 1% in November, following a 1.1% rise in October, according to the latest data from industry researcher Cotality (formerly CoreLogic).
Across Australia, the mid-size capitals continue to perform best. Values in Perth were recorded at 2.4% more than the previous month of October, while Sydney and Melbourne recorded 0.5% and 0.3% rises amid affordability constraints.
The current trend, also seen in 2023 and 2024, is due to supply constraints.
Perth currently has 40% fewer homes for sale than the five-year average at this time of year.
The only blip on the radar was the mid-December auction results, which were dominated by Sydney and Melbourne. They slid back to low 60% clearance rates due to a spike in available properties at the end of the pre-Christmas selling season.
There’s usually a lower clearance rate when there’s a surge of properties going under the hammer.
It’s always good to launch your marketing campaign at the start of a selling season, rather than come in at the end – and the December market proved that point once again.
If you want to be among the first to catch the new wave of 2026 autumn buyers, now is a great time to quickly organise your sale.
Cotality’s research director, Tim Lawless, expressed concern about affordability challenges if prices continued to rise.
He said: “With housing affordability already stretched and worsening, it stands to reason that fewer borrowers will be able to access credit as serviceability barriers become more prominent.
“We can already see the flow-through effect with growth in housing values skewed towards lower price points of the market.”
The median dwelling value is now 8.2 times higher than the annual pre-tax household income, and near record levels of income (45%) are required to service a mortgage at the median value.
Meanwhile, SQM Research has predicted capital city house prices combined will grow by 4%-8% next year.
It said the high-extreme of its prediction was predicated on a rate cut in March and population growth of 500,000 people through to the end of 2026. Sydney and Melbourne prices would rise 2%-6%, while Perth might jump 14% and Brisbane 12%.