Australia could have five capital cities with average house prices above $1 million next year, with one property expert saying the country is entering yet another phase of growth.
Rethink Group CEO Scott O’Neill said Sydney and Melbourne would regain market dominance by 2026 after playing second fiddle to smaller markets.
“We are in the post-recession, pre-recovery period,” he said.
“Historically, the highest returns come from buying exactly where we are now, after adjustment, before the rush.
“The population is growing, supply remains limited, interest rates are easing and borrowing power is increasing.
“The smart money is not waiting, it is positioning itself now.”
Rethink Group CEO Scott O’Neill
O’Neill said “Sydney and Melbourne are back”, with Melbourne expected to lead house price growth by 5.2 per cent this year and 6.6 per cent in 2026, reaching an average of around $1.1 million.
Sydney will follow closely behind, he said, with growth of 7.8 percent, bringing the median to about $1.83 million.
October’s PropTrack Home Price Index had a median home value (houses and units combined) of $1.228 million in Sydney and $846,000 in Melbourne.
![D Sydney Kirribilli inland](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
Sydney may see a 7.8 percent increase in house prices. Photo – iStock
South-east Queensland will remain a powerhouse, O’Neill predicts.
The average house price in Brisbane reached $1.126 million in October, according to the latest PropTrack Home Price Index, while the median house price (houses and units combined) was $976,000.
Brisbane and South East Qld are likely to remain major powerhouses. Photo: Supplied by Knight Frank
The Gold Coast and Sunshine Coast will continue to dominate the fast-growing markets, driven by infrastructure investment and lifestyle appeal, he said.
Meanwhile, Adelaide and Perth are also set to reach record highs approaching or exceeding $1 million, although growth is moderating after two years of double-digit gains.
The average home value in Adelaide is now $880,000, while in Perth it is $899,000, according to PropTrack.
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117 Hart Street, Semaphore, in South Australia is listed for $1.1 million
“If you’ve been waiting for a crash, you’ve missed the bottom. It’s already happened,” O’Neill said.
“The next two years will reward investors who buy quality assets before borrowing capacity increases.”
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Price predictions for 2026
•Sydney: Median $1.83 million (+7.8%)
•Melbourne: $1.1 million (+6.6%)
•Brisbane: $1.09 million (+6-8%)
•Adelaide: $1.05 million (up 5-6%)
•Perth: $950,000–$1 million (5-6%)
•Regional Queensland, NSW and VIC: an increase of 5 to 8%, depending on the pressure on infrastructure and the supply side
•Tasmania and Northern Territory: an increase of 3 to 5% thanks to affordability and low vacancy rates
Source: Rethink group
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O’Neill warned that falling interest rates and relaxed credit buffers would only fuel competition for buyers.
“The Reserve Bank of Australia (RBA) is expected to cut spending by 3 percent by the end of 2026, significantly increasing lending capacity and demand,” O’Neill said.
The research from real estate investment and financing companies also sheds light on the likely hotspots for investors in 2026.
“Investors are now focusing on A-quality residential and commercial assets in fast-growing local government areas (LGAs) that combine strong returns, infrastructure investment and limited future supply,” O’Neill said.
6 Blaxland Place, Narangba, in Brisbane’s north is being auctioned
O’Neill said demand was growing in both capital cities and selected regional hubs.
“We analyze markets primarily at LGA level rather than individual suburbs,” O’Neill said. “That allows us to identify infrastructure pipelines, employment hubs and demographic shifts that will drive long-term growth.”
O’Neill said Sydney and Melbourne were the “smart money strategy” for maximum growth in 2026, while south-east Queensland would offer continued momentum, while Perth and Adelaide would see record highs.
“2026 will be marked by clarity and confidence,” O’Neill said.
“The data shows we have hit the bottom. Investors who act now will see this as the turning point.”
4 Camelia Way, Pakenham, in Victoria has a guide price of $715,000 – $785,000
The research comes after Ray White senior analyst Atom Go Tian said a new phase of price growth was “emerging”.
“The emerging fourth phase suggests that the future belongs to regions that combine both lifestyle appeal and economic substance,” he said.
Mr Go Tian said the lesson of the past decade was clear: “sustainable regional growth requires extreme affordability, real employment incentives or, increasingly, both”.
New boom regions: where to buy now before prices explode
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Reconsider Group’s Top Picks for 2026
Key growth LGAs for 2026 include:
•Queensland: Moreton Bay, Ipswich and the Sunshine Coast
•New South Wales: Shoalhaven, Wagga Wagga and the Central Coast
•Victoria: Greater Bendigo, Ballarat City and the City of Casey (South-East Melbourne corridor)
•South Australia: City of Charles Sturt, Onkaparinga and Salisbury
•Western Australia: Swan, Mandurah and Stirling
•Tasmania: Launceston, Hobart and West Tamar
•Northern Territory: Palmerston, Darwin and Litchfield
Top neighborhoods will experience enormous growth in 2026
Based on affordability, infrastructure projects, yield pressure and population inflow, Rethink Group’s top picks for 2026 are:
•Queensland: Caloundra West, Narangba, Buderim, Ripley, Morayfield
•New South Wales: Nowra, Toukley, South Dubbo, Gobbagombalin, Armidale
•Victoria: Frankston South, Craigieburn, Delacombe, Golden Square, Pakenham
•South Australia: Semaphore, Christies Beach, Paralowie, Lightsview, Nairne
•Western Australia: Dudley Park, Ellenbrook, Innaloo, Rivervale, Bayonet Head
•Tasmania: Kings Meadows, Trevallyn, Legana, Youngtown, Riverside
•Northern Territory: Durack, Rosebery, Zuccoli, Nightcliff, Coolalinga
3 Antonino Drive, Rosebery, in the NT has a list price of $895,000
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