We’re still feeling the echoes of 2025 in the property market as we head into the new year, and if you’re watching closely, there’s plenty to pay attention to without getting overwhelmed.
Last year ended with a surprisingly strong performance across most markets. National dwelling values climbed roughly 8.6% in 2025, adding about $71,400 to the median home value – the strongest calendar-year gain since 2021.¹ Price growth wasn’t uniform everywhere, but the overall trend was upward even in places that felt sluggish for a while.
What does that actually mean? It means demand is still there. People are moving, families are upgrading, and buyers who got in earlier are seeing real equity growth, even if it doesn’t always make headlines.
And now we’re turning our attention squarely to interest rates. After three rate cuts in 2025, the Reserve Bank of Australia held the cash rate at 3.60% as of December,² and rate cuts are not guaranteed this year. In fact, economists are increasingly suggesting we could see rate rises in 2026, with some forecasts pointing to a possible hike as early as February.³
Why? Inflation is still running above the RBA’s preferred 2-3% target band, so the central bank is cautious about easing monetary policy too quickly.²
It’s also worth addressing a common fear: that Australia could experience a property crash like those seen overseas. In cities such as London and parts of Canada, prices fell sharply following rapid price growth, aggressive interest rate hikes, and oversupply.⁴⁻⁵ Australia’s conditions are different. Chronic housing undersupply, strong population growth, and tighter lending standards have so far acted as buffers against sharp, widespread price falls.⁶
For first-home buyers, government support remains relevant. The First Home Guarantee allows eligible buyers to purchase with as little as a 5% deposit without paying lenders mortgage insurance,⁷ while the First Home Super Saver Scheme helps buyers accelerate deposit savings through tax-effective super contributions.⁸
It’s also important to remember that the Australian property market doesn’t move as one single market. It’s really a collection of many smaller markets, each driven by different factors like local employment, population growth, supply constraints, and the type of housing available. While some areas will experience strong growth, others may plateau or even go backwards for periods of time. This is why headlines about “the market” can be misleading. Performance is rarely uniform, and outcomes depend heavily on where you buy, what you buy, and why. In markets like this, careful selection matters more than ever – and well-chosen locations tend to quietly outperform the averages over time.
Here’s the heart of the update for anyone thinking about buying: prices are expected to keep rising, but at a more measured pace than in 2025. This is less a boom market and more a selective market with pockets of opportunity.
So if you’re stepping into the market now, go in with your eyes open. Prices aren’t collapsing, but preparation, structure, and strategy matter more than ever.
- Cotality. (2026). Housing Value Index: January 2026. https://www.cotality.com
- Reserve Bank of Australia. (2025). Statement on monetary policy – December 2025. https://www.rba.gov.au
- Australian Securities Exchange. (2026). RBA rate tracker. https://www.asx.com.au
- Office for National Statistics. (2024). UK House Price Index. https://www.ons.gov.uk
- Canadian Real Estate Association. (2024). National housing market statistics. https://www.crea.ca
- Australian Bureau of Statistics. (2025). National, state and territory population. https://www.abs.gov.au
- Australian Government – Housing Australia. (2025). First Home Guarantee. https://www.housingaustralia.gov.au
- Australian Government – First Home Buyers (2025). First Home Super Saver Scheme. https://firsthomebuyers.gov.au