2026 market shifts to put agents’ pricing skills to the test

According to Domain chief of economics and research Nicola Powell, 2025 has been an eventful year for property, with the momentum continuing in 2026.

“We've seen a big jump in investment activity, which is a good forward indicator of buyer segments over the next six months,” Powell told REB.

“So we know that investors are going to be active in the early part of next year, and then the expansion of the Home Guarantee Scheme is going to bring forward a whole wave of demand to the housing market.”

Less than six weeks before the end of the year, Domain Forecast Report 2026 said that property growth will unfold in two phases: strong early momentum from first home buyers, investors, lower rates, and rising incomes, followed by moderated growth in the second half of the year.

Powel said that, in contrast to 2025, the new year will see property prices grow across all capital cities, which hasn’t always been the case.

“This year, we have had Melbourne and Canberra underperforming, but we are predicting that they will fully recover.”

“In some capital cities, units will also outperform houses as a result of first home buyers being priced out, steering demand towards apartments while investors continue to be a growing force in the unit market.”

“In any case, we're not forecasting any pullback in price,” she said.

She added that as the market continues to shift, agents will have to nail their property appraisal more than ever, to ensure they price accordingly as competition ramps up.

According to Powell, 2026 won’t be a booming market, but it won’t be a subdued one either, with all segments performing differently, and the landscape could change rapidly at any moment.

“It will be critical for agents to guide sellers, educating their customers, and Australians on what's happening in those localised dynamics.”

“Agents will need to keep their finger on the pulse in terms of the economy, in terms of what's driving the market, to help people make better decisions when it comes to buying and selling.”

Across the capital cities, Sydney will continue to be the most expensive market, recording the strongest house price growth, with the median reaching $1.92 million by 2027, while unit prices rise to $892,000, supported by affordability constraints and renewed first-home-buyer demand.

“We know that Sydney goes through expansion and contraction, which is a sign of a healthy property market, but prices will continue to rise on the trajectory to be 2 million by 2027,” Powel said.

“Rising prices have a domino effect."

“When a city becomes so grossly unaffordable, young families are leaving, and it pushes that pressure to other capital cities in terms of demand.”

According to Powell, Melbourne will have completely recovered in 2026, with the median house price reaching $1.17 million, driven by improved affordability and renewed buyer confidence.

“This year, Melbourne has underperformed relative to other capital cities; it used to be much more expensive than Brisbane, Adelaide and Perth, but they are now rubbing shoulders.”

“Melbourne has relative value that's built up over time, and investors are starting to look back at the city, particularly with the gross profile, likely to come back.”

“For Melbourne, we're not forecasting strong rates of price growth, but modest and sustainable.”

Domain data showed that auction clearance rates and the Melbourne relative value compared to other capitals support continued momentum, while affordability pressures remain less restrictive than in Sydney or Adelaide.

Additionally, Powell said that rising interstate migration to Victoria is expected to further boost housing demand, adding pressure to both prices and rents.

In Brisbane, house prices are forecasted to rise 5 per cent to a record $1.19 million, while units are expected to grow 7 per cent, maintaining the fastest unit growth nationally.

The market will also continue to benefit from lower interest rates, recovering household incomes, and major infrastructure projects ahead of the 2032 Olympic Games.

Down South in Adelaide, house prices are expected to ease to 4 per cent growth, reaching $1.11 million, with units slightly higher at 5 per cent growth to $681,000.

Powell said that affordability pressures, following years of double-digit gains, will moderate momentum in Adelaide, while demand for more affordable homes remains firm.

Similarly, Domain has forecasted Perth house prices to rise by 5 per cent in 2026, surpassing $1 million, supported by lower interest rates, strong income growth and first-home-buyer support, while units grow slightly faster to $613,000.

According to the report, the Canberra market will also fully recover in 2026, with house prices reaching a median of $1.18 million and unit prices rising to $631,000, supported by improving affordability and steady population growth.

Powell said that price growth in Canberra will likely remain more subdued than in other capitals due to modest population growth and a well-matched housing supply.

“What we're expecting is modest rates of price growth.”

“Canberra won’t be driven by premium or the very affordable markets, but by the middle sector of the market, buyers who are looking to upsize,” Powell concluded.