Perth booming, Brisbane selling in days — but cracks are forming in Australia’s property market

Perth is still leading the country on price growth, Brisbane is selling homes in a week, and Sydney is within a whisker of its all-time peak. But rising rates, softening developer confidence, and a first home buyer scheme losing steam are reshaping the investment calculus.

Australia’s property markets have entered 2026 with a familiar set of conditions — tight supply, strong migration, and price growth that continues to outpace many forecasters’ expectations.

But look beneath the headline numbers and a more nuanced picture emerges, one where geography, price point, and asset type are increasingly determining who wins and who waits.

That’s the key message from the latest PIPA National Market Update, which draws on analysis from buyers agents and property advisers operating across every state and territory.

“The market insights reveal a national market shaped by low stock, strong migration, and shifting affordability — conditions that continue to support prices even as economic settings evolve,” Cate Bakos, PIPA Chair, said.

Victoria: a tale of two markets

Melbourne’s market in 2026 is defined by contrast.

Median house prices edged up around 0.3 per cent in February, with strong competition for well-located family homes in the middle ring, particularly around the $1.5 million mark, sitting alongside softer conditions in the prestige segment and inner-city apartments.

Victoria’s emergence is a dynamic that finance brokers are also noticing.

Helen Avis, Director of Finance at Specialist Mortgage, said Victoria has become something of a surprise focus for her investment clients.

“The biggest shift in market sentiment has been towards Victoria, which is something of a newcomer,” Ms Avis said.

“Previously nobody was buying there but it seems to be coming out of the doldrums and gaining traction.

"Interest has definitely elevated, by virtue of the fact you can now get outstanding value for money on Melbourne property.”

Ms Avis said her clients, who largely focused on NSW, Victoria, Western Australia and Queensland, are increasingly drawn to Melbourne’s relative affordability at a time when other markets have priced out many investors.

The tale of two markets was highlighted by Antony Bucello, Director of National Property Buyers.

“In contrast to the outer suburbs and mid-priced market price ranges, the prestige market is feeling the impact of tighter borrowing capacity, while one-bedroom apartments in the inner city have also shown limited price growth,” he said.

Speculation ahead of the Federal Budget around potential capital gains tax and negative gearing changes has added a layer of uncertainty, though Mr Bucello noted that any changes would likely have limited impact on the roughly two-thirds of investors who own just one property.

Rental vacancy sits at around 2.4 per cent, with inner-city apartments yielding around five per cent and suburban houses closer to 3.5 per cent.

Western Australia: still the nation’s standout

If there’s one market investors are watching, it’s Perth.

Dwelling values rose by 2.5 per cent in March alone, contributing to annual growth of 24.3 per cent, which is more than double the national average of 9.9 per cent over the same period, according to Cotality data

Perth-based property specialist Laura Kolomyjec, of Dynamic Advisory, said the driver is straightforward: extreme undersupply meeting rapid population growth.

Advertised stock levels remain around 48 per cent below the five-year average, and Western Australia is currently the fastest-growing state in the country by population, according to the ABS.

“Units are also accelerating, growing faster than houses in recent months as affordability constraints push buyers to diversify,” Ms Kolomyjec said.

“For investors, rental fundamentals remain firmly supportive, with tight conditions continuing to push rents higher.”

Queensland: intensity that’s hard to overstate

Brisbane’s median dwelling value has surpassed $1,080,000, with values up 1.6 per cent in January alone and 5.1 per cent over the quarter, according to Cotality.

But the more telling statistic may be this: Brisbane properties are typically receiving multiple offers and selling within one week of the first open home, with average days on market sitting at just 21 days in January 2026.

“If you're driving around Brisbane on a Saturday, you may notice buyers lined up down the street, waiting to attend open homes," said Fern Walcott, buyers agent and QPIA at Exclusive Property Buyers.

Total sales listings in Brisbane are down 25.9 per cent compared to the same time last year, while sales volumes have fallen only 3.7 per cent, a clear signal that stock is being absorbed almost as fast as it hits the market.

Regional Queensland is performing strongly too, with Bundaberg and Toowoomba recording quarterly growth of 5.4 per cent and 5.7 per cent respectively.

Rental vacancy across Queensland sits at just one per cent, with rents up 6.4 per cent annually in Brisbane and 6.5 per cent in regional Queensland over the year to January 2026, according to Cotality.

New South Wales: near the peak but headwinds building

Sydney dwelling values are now just 0.1 per cent below the record peak recorded in November 2025, having risen 6.4 per cent annually. Yet the market is not without friction.

The RBA cash rate increase from 3.60 per cent to 3.85 per cent has added to borrowing costs, and buyers are showing more caution. The preliminary auction clearance rate sits at 65.5 per cent; above the long-term average of 64 per cent, but auction numbers are showing fewer active bidders, according to Rich Harvey, CEO of Propertybuyer.com.au.

“I have noticed some softening in some markets with agents chasing us up to confirm offers,” Mr Harvey noted.

New listings in Sydney are up 6.8 per cent year-on-year, though total listings remain 22.9 per cent below the five-year average. The median vendor discount sits at -3.0 per cent, with properties taking a median of 29 days to sell.

The rental market remains tight, with vacancy at 1.5 per cent, annual rent growth at 5.8 per cent, and gross yields at three per cent.

South Australia and Tasmania: momentum and recovery

Greater Adelaide's median house price now sits at $980,815, with annual growth reaching nine per cent in many suburbs and auction clearance rates holding at 70 to 75 per cent.

The South Australian election in March unleashed a wave of housing incentives from both Labor and Liberal parties, with victorious Labor’s downsizer stamp duty concessions and first home buyer grants expected to support activity further.

Suburbs including Salisbury (15.7 per cent growth), Tea Tree Gully and the Adelaide Hills (both 13.6 per cent) are leading the charge, according to Andrew Sorensen of Prospa Property Advisory.

Tasmania, meanwhile, is recovering from its 2022 correction with measured confidence.

Hobart’s median dwelling value has risen 2.6 per cent over the past quarter to $722,339, while the city’s rental vacancy rate sits at a critically tight 0.3 per cent, with median weekly house rents hitting $600.

Regional centres, particularly Launceston and the Devonport/Burnie corridor, are outperforming the capital, attracting investors seeking yields above five per cent.

The wider picture: rents rising, confidence softening

Nationally, capital city rents rose 4.6 per cent over the March quarter to a median of $680 per week, according to PropTrack. That marked a $30 per week jump following a period of relative stability throughout 2025.

Perth, Darwin and Hobart recorded the strongest annual growth at seven to eight per cent.

But not everything is pointing upward. The Procore/Property Council Industry Sentiment Survey recorded a 19-point drop in national confidence in March 2026 — from 123 to 104, the sharpest quarterly fall since June 2022 — with housing capital growth expectations hitting their lowest level since 2020.

Rising construction costs, labour pressures, and global uncertainty are slowing the conversion of development approvals into actual homes.

Property Council CEO Mike Zorbas was direct: “With costs high and confidence fragile, even relatively small increases in uncertainty can delay or stall projects before construction begins.”

On the ground, the mood shift is being felt by those fielding inquiries from prospective buyers.

Ms Avis of Specialist Mortgage said the current climate is unlike any she has seen recently.

“These are indeed uncertain times, and that is reflected to some degree by the volume of enquiries and clients we are getting from the Middle East,” Ms Avis said.

“Auction clearance rates have dropped considerably, so there are definitely some changes evolving in market sentiment.”

For investors, the supply story remains the critical thread.

Fewer new homes in the pipeline means continued upward pressure on rents and values, particularly in markets where population growth is already outstripping available stock.

The question for 2026 is whether that structural undersupply continues to carry prices forward, or whether the weight of higher rates and eroding confidence begins to slow the momentum.