Australia’s housing market is heading into 2026 with forecasts that point in one direction across every state and territory. SQM Research’s new outlook suggests that even under stress-tested scenarios, no capital city is expected to record a fall next year. It reflects a country where population growth, constrained construction, and continued demand are shaping outcomes more strongly than short-term economic swings.
The base case predicts national price growth of between 6 and 10 per cent, built on the expectation of modest rate cuts from mid-year, a population increase of about 390,000 people, and demand for roughly 150,000 dwellings. Completions are forecast at 180,000, creating a paper surplus that does little to ease pressure because the new supply often does not match where people are moving.
Perth again stands out, but the extent of its outlook becomes clearer once all the scenarios are placed side by side. While the base case range is 12 to 16 per cent, the upper-end “economic rebound” scenario places the city between 17 and 21 per cent, the highest forecast spread in the country. Even in the event of sticky inflation or a global slowdown, Perth is still projected to remain at the front of the national market.
Brisbane sits just behind. The city’s base range of 10 to 15 per cent is supported by steady population inflows and continuing interest from buyers migrating from southern states. Under stronger economic conditions, Brisbane edges up to the 13 to 18 per cent range. The broader state story is just as strong, with the Sunshine Coast and the Gold Coast projected to grow between 7 and 15 per cent depending on scenario. Mackay and Airlie Beach are also included in the upper regional ranges, reflecting shifts in internal migration patterns that have continued long after the pandemic.
Darwin’s return to form marks another clear difference from recent years. The city’s base forecast of 12 to 16 per cent suggests a sentiment shift shaped by tight rental conditions, moderate starting prices, and a pipeline of defence and infrastructure activity. If economic conditions improve further, Darwin climbs as high as 14 to 18 per cent, placing it in the same bracket as the strongest east-coast markets.
Adelaide remains one of the most consistent performers. Limited new supply and steady affordability push its projections between 10 and 14 per cent under the base case, rising into the mid-teens if the national economy strengthens.
Melbourne’s steadier path sits within a 4 to 7 per cent range. High construction volumes and affordability pressures continue to moderate growth, even as the state’s population expands. Sydney’s outlook remains positive but slower, with projected gains between 3 and 6 per cent due to higher price points and tighter mortgage servicing conditions.
The broader economic settings reinforce the forecasts. Inflation is expected to ease towards the mid-twos, while unemployment is projected to rise to around 5 per cent. Rate cuts of between 25 and 50 basis points from the middle of the year form part of the assumptions, helping lift borrowing capacity after a long stretch of tightening.
Hobart and Canberra reflect the national mid-range. Hobart is tipped to return to moderate growth after two subdued years, while Canberra retains its reputation for stability, with forecasts between 3 and 6 per cent.
Across all the modelled outcomes, from sticky inflation to full economic rebound, SQM does not forecast a decline in any capital city. It points to a supply pipeline that remains thin, regional markets that are still absorbing population shifts, and construction costs that continue to place limits on new projects.
Those pressures, along with interstate movement and rate expectations, are shaping a national outlook where the direction of prices is consistent even as the pace varies. The report suggests that the country moves into 2026 with housing demand still outstripping new supply in many of the places people are trying to live.
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