Experts outline their price and rent forecasts for 2026

As 2025 draws to a close, three major research groups – Domain, SQM Research and Ray White Group – have released updated forecasts for 2026. While their methodologies differ, all three expect prices and rents to continue rising next year. At the same time, they emphasise that these are predictions, not certainties, with interest rates, construction activity and economic conditions likely to shape how the market ultimately unfolds.

Domain expects every capital city’s median house price to be at a new record high by the end of 2026. Across the combined capitals, house prices are forecast to rise 6%, led by gains of 7% in Sydney and 6% in Melbourne. Unit prices are also expected to rise 5% in the combined capitals, with particularly strong growth forecast in Brisbane and Perth. Domain’s Chief of Research and Economics Nicola Powell said demand remained elevated and that the unit market was expected to outperform in several cities, partly due to buyers chasing relative affordability. She noted that more housing supply was starting to come through, which could help conditions ease toward the end of 2026.

SQM Research’s base-case forecasts point to even stronger growth in some cities. It expects house prices to rise 12-16% in Perth and Darwin and 10-15% in Brisbane and Adelaide, while Sydney and Canberra are forecast to record more moderate gains. SQM also expects rents to rise in every capital city next year, with the steepest rises predicted in Hobart, Darwin and Perth.

Interest rates will be the wildcard in 2026

Ray White Group Chief Economist Nerida Conisbee said the national market was heading into 2026 with “far more momentum than most expected a year ago”, but also with an unusual degree of uncertainty. She said the affordable tier of properties was likely to continue outperforming, with limited supply pipelines supporting prices. However, she emphasised that interest-rate timing remained the “biggest wildcard”, with a delayed rate cut likely to produce steadier growth and an earlier-than-expected cut likely to “re-accelerate prices”.

While the exact outcome for 2026 will depend on how these factors play out, the consensus from Domain, SQM Research and Ray White Group is that prices and rents are more likely to rise than fall next year, although at varying speeds across different cities and segments.

Assuming that’s true, buyers who move sooner rather than later might be able to get ahead of further price rises. Reach out if you’d like to secure a home loan pre-approval.