Australia’s housing outlook for 2026 is being shaped by a busy mix of federal schemes, state reforms and a market that refuses to move in one clear direction. The Real Estate Buyers Agents Association of Australia says conditions across capitals and regional centres remain steady, although the picture varies sharply between cities and price brackets.
REBAA President Melinda Jennison said affordability pressures and tight borrowing capacity continue to define buyer behaviour, even as some parts of the country stabilise. She said performance has differed across the map.
“While some markets have experienced softer conditions as higher rates and rising stock levels took the heat out of price growth, others, particularly those still perceived as relatively affordable, have remained resilient, underpinned by population growth, tight rental markets and limited new housing supply,” Ms Jennison said.
Demand remains strong for well located and quality homes, she said, even as many buyers adjust expectations. Lower value tiers have drawn increased interest from first home buyers under the First Home Guarantee Scheme, while higher end markets have eased after rapid gains in recent years.
The wider debate around affordability continues to sit alongside these trends. Analyst and adviser to the former prime minister, Stephen Koukoulas, highlighted the scale of first home buyer activity this year, saying, “To be sure, dwellings are expensive but I note that in the 12 mths to September there were 116,682 owner occupier first home buyers and a further 6,647 investor first home buyers. That’s approximately 2,350 FHB’s a week.”
Some critics say the raw numbers hide how far conditions have shifted. Comments circulating online point out that activity today still trails the stronger surges seen during 2009 to 2010, the 2016 to 2017 cycle and the 2020 to 2021 stimulus period, suggesting that context matters when interpreting the volume of new buyers.
Others argue the affordability narrative is not uniform. Melbourne resident Zuvele Leschen said, “My sons are in their late 20s. I don’t know anyone in their circle (young professionals) who hasn’t been able to afford to buy a house.” At the same time, concerns about debt levels keep growing. Richard Ings noted the size of new loans being taken out in New South Wales. “As of June 2025, the average new loan in NSW is now over $800k. That’s roughly $50k a year in after-tax repayments. And the average first-home-buyer loan has blown out 33 percent in 5 yrs. This is crushing young buyers. People our age never faced this kind of fiscal hurdle.”
Comparisons with overseas and regional markets add to the debate. Commentators highlight that California’s house price to income ratio is 7.8 times, while regional Tasmania sits at 7.7 times according to recent estimates. These examples have resurfaced as part of a broader discussion about how stretched buyers have become.
Journalist Tarric Brooker said policymaker choices continue to shape outcomes across the country. “Australian housing is not a free market, its defined by policymaker intervention and their chosen settings (tax policy, migration levels etc), it has been for over two decades. Even the Productivity Comission note the negative impact on affordability of demand side intervention.”
Against that backdrop, state reports from REBAA outline how 2025 has unfolded across the country. New South Wales has moved through the year in a firm upswing, Victoria has regained momentum after a flat period, Queensland remains one of the most competitive capitals, and Western Australia continues to post rapid gains on limited stock. South Australia has seen record prices across both metro and regional areas, while Tasmania’s renewed confidence has been driven by tight supply and steady demand.
The Canberra market is also finding its footing again, shaped by affordability pressures at the lower end and more cautious behaviour at the premium end. As ACT representative Claire Corby put it, “Quality and value will be of prime concern to savvy property buyers.”
Across all states, the recurring theme is supply. Whether in Perth where listings have fallen sharply, Melbourne where building approvals remain at record lows, or Tasmania where open homes are drawing large crowds, the shortage of available stock keeps pushing competition into particular brackets. The First Home Guarantee, which has lifted participation in several states since October, is expected to keep shaping that segment through the start of 2026.
Ms Jennison said professional guidance is becoming more central in this environment as buyers face tight markets and an evolving policy mix. “REBAA members are working on the ground to source opportunities including off market and pre market properties, provide independent advice on pricing and risk, and guide clients through negotiations, contract conditions and due diligence so they can make informed, long term decisions rather than reactive ones.”
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