Despite the property industry experiencing a period of uncertainty driven by budget changes, global events, and slowing price growth, listings would still be available to agents who understand the market.
Buyer confidence has dipped amid rate rises, warfare in the Middle East, and tax reforms announced in the recent federal budget, with investors holding a more cautious view of the market.
According to PRD’s latest Australian Economic and Property Report 1st half 2026, Australia’s property market has shifted dramatically away from 2025 trends, with buyer confidence taking a hit.
According to PRD chief economist Diaswati Mardiasmo, the combination of the budget’s tax reforms and three cash rate hikes had created a tight market for owner-occupiers and investors.
“There are changes both from the cash rate and the federal budget that are going to squeeze a lot of people and force them to make financial decisions, directly impacting the real estate market,” Mardiasmo told REB.
“This can be in terms of being forced to sell if mortgage repayments get too high for an owner-occupier, or no longer financially viable as an investment.”
Mardiasmo said that economic conditions had caused hesitation, which would creep into the property market.
“Many people will have a lot of questions, as there is a lot of noise in the market,” Mardiasmo said.
“Higher inflationary economic conditions can cause people to pause, and we are seeing this in the market right now.”
Confidence not a one-size-fits-all metric
The report found that consumer sentiment had declined in early 2026 amid global uncertainties and geopolitical instability, with Australians now preferring to save rather than spend.
Additionally, business confidence had dropped to a level last seen during the Global Financial Crisis.
While the “time-to-buy a dwelling index” held firm at 85.8 on a national level, performance varied significantly across states.
Across the country, most states recorded a decrease in their buyer sentiment, with only South Australia and NSW recording a rise.
The time to buy a dwelling index score was highest in South Australia, at 93.1, despite a 3.4 per cent year-over-year decrease, while NSW followed closely with 92.6.
Western Australia had the lowest score on the index, at 66.1, suggesting that market confidence had fallen after years of high performance.
Despite growing market uncertainty driven by global economic factors and the government’s recent federal budget, Mardiasmo said the Reserve Bank of Australia (RBA) was optimistic that inflation would ease toward the back end of 2026 or early 2027, creating an opportunity for buyers to act.
“Now more than ever, it is the time to concentrate on your local market and individual finances.”
Supply and tax changes
Mardiasmo said that while the recent federal budget had included measures to increase housing supply, such as the $2 billion Local Infrastructure Fund, “the devil was in the details” when it comes to how it will be applied
“We need supply, no doubt about that, and wrap-around infrastructure is what has been a stalling point for creating new development in greenfield opportunities,” Madriasmo said.
“Overall, it sounds good in principle, but we need to see an implementation plan.”
She said that while the changes to negative gearing and capital gains tax had the potential to spook investors, there were some safety nets in place to protect them.
“If you have held the asset for a while and have made quite a profit through property price growth, you would still be adding to your overall wealth for retirement.”
What’s coming next?
According to PRD, despite uncertainties, opportunities in the market still existed for buyers who knew where to look.
“Having the correct data and information to make decisions is the key.”
Mardiasmo said that while house prices were still extremely high, there was evidence of slower price growth in some capital cities.
“Brisbane is a great example – as of the end of April 2026, Brisbane’s median house price is $1,430,000; a peak in the market, but with a 4.3 per cent growth slower than the 9.7 per cent in 2024–25.”
She said that a tight market presented an ideal opportunity for both buyer and seller to achieve strong results, as long as they understood the market around them.
“In a tight market, that’s actually where the opportunities are.”
“If someone is forced to sell but you are in a better financial position, that’s your time to enter. If the market is quieter because people are rethinking and there is less competition, that’s your time to enter.”
“Even as a seller, you can still make the best of it, especially if you own a house, because houses are still scarce.”
Additionally, Mardiasmo said the inflation rate was projected to reach almost 5 per cent in the June quarter, paving the way for more cash rate movement from the RBA.
“This leads to higher cash rate expectations for 2026 – we can expect more cash rate hikes,” Mardiasmo concluded.
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