Australian property prices have continued rising in 2026, but the story is more complicated than a single national figure suggests. Affordability has reached record lows, the gap between cities is widening, and the data on what it now takes to buy a home in Australia is confronting.
Here is what the publicly available data shows about house prices across Australia in 2026, explained as clearly as possible based on my own research.
What the National Property Data Shows
According to Cotality’s Home Value Index the national median dwelling value stood at $922,838 as of the end of February 2026 — up 9.9 per cent year on year. Across the combined capital cities, the median value reached $1,014,401 — the first time the combined capitals median has crossed the million dollar mark. Combined regional markets outperformed, with dwelling values rising 11.1 per cent year on year to a median of $751,327.
These are the headline figures. But the data behind them tells a more complex story.
Not All Cities Are Equal
Property price growth in 2026 is highly uneven across Australia. According to KPMG’s forecasts for 2026, Perth is expected to lead house price growth at 12.8 per cent, followed by Brisbane at 10.9 per cent and Darwin at 10.5 per cent. Sydney and Melbourne are expected to see more modest growth as affordability constraints bite harder in markets where prices are already the highest.
Domain’s 2026 Forecast Report projects the median house price in Sydney will rise 7 per cent to approximately $1.92 million by the end of 2026. Melbourne is forecast to rise 6 per cent to approximately $1.17 million. Brisbane’s median house price is expected to reach approximately $1.19 million.
The divergence between cities reflects a fundamental shift in where value remains accessible. Perth, Brisbane, and Adelaide attracted buyers priced out of Sydney and Melbourne through 2024 and 2025 — but several years of rapid price growth in those markets is now pushing affordability constraints there too.
The Affordability Picture — What the Numbers Actually Mean
This is where the data becomes genuinely confronting. According to Cotality, Australia’s housing affordability reached new lows by the end of 2025. Servicing a new housing loan nationally now requires approximately 45 per cent of household income. In Sydney, that figure rises to 68 per cent of pre-tax household income — nearly twice the 30 per cent threshold considered housing stress.
Home values have surged approximately 47.3 per cent since March 2020, adding around $280,000 to the median dwelling value nationally. Three years ago, approximately 43 per cent of median income households could afford to buy a home in Australia. According to PropTrack’s Housing Affordability Report, that figure has now fallen to just 14 per cent nationally — and 10 per cent in Sydney.
According to Wikipedia’s analysis of the Australian property market drawing on multiple housing data sources, by 2026 a solo purchaser earning the average full-time wage is unable to purchase a typical house in any Australian capital city. They are also unable to purchase a median-priced apartment in Sydney, Brisbane, Adelaide, or Perth.
The time required to save a 20 per cent deposit has also increased sharply. It now takes the average Australian approximately 11 years to save for a home deposit — longer in Sydney — according to PropTrack research.
Sydney — The World’s Second Most Unaffordable City
Sydney’s median house price now stands at approximately $1.75 million — 13.8 times the median household income, according to data cited in international housing affordability comparisons. This places Sydney as the second most unaffordable major housing market globally, behind only Hong Kong at 14.4 times median income. Sydney’s affordability score sits in what researchers categorise as the “impossibly unaffordable” range.
For context on how mortgage repayments interact with the current interest rate environment, see our RBA interest rate decisions.
Government Schemes for First Home Buyers
The Albanese Government has expanded two key schemes designed to help first home buyers enter the market.
The First Home Guarantee scheme allows eligible first home buyers to purchase a property with a deposit as low as 5 per cent, with the government guaranteeing up to 15 per cent of the property value — meaning buyers avoid lenders mortgage insurance. From late 2025, this became a demand-driven program with no cap on places, meaning any eligible buyer who can meet the income and deposit requirements can access it.
The Help to Buy scheme, which launched applications in December 2025, allows the federal government to take a 30 per cent equity stake in existing homes and a 40 per cent equity stake in new builds for eligible buyers. This reduces the amount a first home buyer needs to borrow, lowering monthly repayments.
Domain’s analysis described the combined effect of these two schemes as equivalent to the same impact on buyer demand as up to five RBA rate cuts simultaneously — given the volume of new buyers they bring into the market.
The Counterargument — Do Buyer Schemes Push Prices Up?
Several economists have raised concerns that demand-side schemes accelerate rather than solve Australia’s housing affordability problem. When more buyers enter the market with government-backed borrowing capacity in an environment of limited supply, the increased competition tends to push prices higher — particularly for entry-level properties in the $500,000 to $900,000 range where first home buyers compete directly with investors.
The International Monetary Fund called for Australia to withdraw the First Home Guarantee scheme in 2025, arguing it drives property prices up rather than improving affordability in any sustainable way. The Australian Council of Social Service in February 2026 recommended reducing the capital gains tax discount from 50 per cent to 25 per cent over five years, and ending negative gearing for new investment properties — arguing this would reduce home prices by 1 to 4 per cent and increase the home ownership rate by 2 to 5 per cent.
These are contested policy positions. But the data is clear that existing tax settings and buyer assistance schemes have not reversed the long-run trend of declining affordability in Australian housing.
What Is Driving Property Prices Higher
Several structural factors continue to push Australian property prices upward despite deteriorating affordability.
Population growth remains a primary driver. Australia’s population is growing through net migration, adding to housing demand faster than new supply is being delivered. According to KPMG’s modelling, new dwelling completions would need to be approximately 17 per cent higher than current forecasts to bring rental growth — let alone purchase prices — back to normal levels.
The housing supply shortfall built up over several years of under-building is estimated at between 200,000 and 300,000 dwellings, according to AMP Capital research. Building approvals rose 12.83 per cent year on year in 2025, which is a positive sign, but the pipeline of completed dwellings is slow to flow through.
Investor activity has also rebounded strongly. ABS lending data shows investor loan values reached $40 billion in the September 2025 quarter — above the previous peak of $33 billion in 2022.
Where House Prices Stand in 2026
Based on the most recent available data, Australian property prices are continuing to rise in 2026, though the pace and distribution of that growth is highly uneven. The national median has crossed $922,000, combined capital city medians have exceeded $1 million, and affordability by multiple measures has reached the worst levels on record.
The Westpac-Melbourne Institute survey recorded its “time to buy a dwelling” index falling to 82.9 in March 2026 — a new cycle low and well below its long-run average of 120 — reflecting how stretched household sentiment about buying property has become.
Whether prices continue to rise, stabilise, or begin to moderate will depend significantly on the path of interest rates, the pace of new housing supply, and population growth. For more on how rent costs are moving in parallel with purchase prices, see our coverage of Australia’s rent crisis. For the full picture of everyday costs, see our 5 things getting more expensive.
Fenro will continue to report on property data as new figures are released.
This article is for general informational purposes only and reflects the author’s own research and understanding of publicly available data. It does not constitute financial or property investment advice. Data was accurate at the time of writing — always verify current figures directly with Cotality, Domain, PropTrack, and other official sources.
