Australia house prices set to rise in 2026 as rate cuts fuel market – realestate.com.au

Rate cuts from mid-2026 could trigger a price sprint, with SQM Research seeing national home values ​​rise by 6 to 10 percent and several capitals posting double-digit gains.

Perth and Darwin are expected to take the lead, with increases of as much as 12 to 16 percent, as tight supply meets renewed demand.

According to SQM’s Boom and Bust report, cutting rates would shift the market from resilience to acceleration, with Brisbane and Adelaide also poised to outpace the country if the Reserve Bank stays on track.

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Perth is forecast to rise by 12 to 16 per cent, which would take the WA capital’s median from $899,000 to about $1,006,880 for a 12 per cent increase and $1,042,840 for a 16 per cent increase, based on PropTrack data.

Darwin’s median of $565,000 will rise to roughly $632,000 to $655,400, while Adelaide expects growth of 10 to 14 per cent, pushing the median from $880,000 towards $1 million.

In Brisbane, buyers could spend an extra 10 to 15 per cent next year, taking the city’s average value of $976,000 above $1 million – to about $1,073,600 for a 10 per cent gain or $1,122,400 for a 15 per cent gain.

Melbourne, Hobart and Canberra are the relative underperformers this cycle, with smaller increases forecast.

Melbourne and Hobart are expected to rise 4 to 7 per cent – ​​bringing the median to at least $879,840 and $709,280 respectively – while Canberra’s median is expected to rise 3 to 6 per cent to between $884,770 and $910,540.

SQM’s base case assumes interest rates remain stable until mid-2026, before one or two 25 basis point cuts, a stable but sluggish economy and inflation averaging 2.5 to 2.7 percent.

Population growth is expected to moderate to around 390,000 people (1.4 percent), creating demand for around 150,000 homes, while completions will increase to around 180,000 – a small surplus of around 30,000 for the year.

SQM Research Director Louis Christopher

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“2025 has been a year of resilience for the Australian property market, driven by strong population inflows and initial monetary policy easing; plus in recent months the First Home Buyer Deposit Scheme,” said SQM managing director Louis Christopher.

“However, as we look to 2026, the outlook is driven by a range of potential economic paths, from a sluggish economy – which is our base case – to persistent inflation delaying rate cuts to a global slowdown; or even a robust economic recovery is possible. Our scenarios highlight the market’s sensitivity to these factors, with Perth, Brisbane and Adelaide in all cases poised for double-digit growth due to their supply constraints and economic momentum.”

If the cuts happen in time and supply remains tight, 2026 could be one of the strongest price years of the decade. If inflation remains persistent and relief fades, gains may be more modest – but the bias is greater.