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House prices are set to reach a new high in 2026, according to new analysis from property platform realestate.com.au, despite a slowdown in the pace of growth.
Released last Friday (19 December), realestate.com.au’s latest Property Market Outlook has forecast home prices across the combined capitals to grow between 6 and 8 per cent over 2026, slightly slower than the 8.5 per cent growth recorded over 2025.
However, projections of a stable cash rate – and even the potential for hikes – have prompted the platform to provide a more modest growth forecast for the coming year.
REA Group senior economists Angus Moore and Anne Flaherty said that stretched housing affordability pressures suggest house price growth will remain well below the 20–30 per cent annual gains seen in past real estate booms.
“Demand will be supported by population inflows, income growth, investor activity, and a recovery in borrowing capacity following 2025’s series of rate cuts,” they said.
“The expanded Australian Government 5 per cent deposit scheme and Help to Buy shared equity scheme will also reinforce demand from first home buyers.
“But with interest rates now expected to remain on hold for an extended period, demand growth will increasingly be constrained by repayment burdens and deposit hurdles.”
Housing accessibility is also having an impact, according to the economists.
“On the supply side, new housing delivery continues to lag population growth. Total listings volumes are low relative to history in many parts of the country, limiting the stock of homes for sale. These factors will continue to place a floor under prices throughout 2026,” they added.
“These dynamics point to continued price growth in 2026, albeit at a slower pace than in 2025. The exceptional outperformance of Perth, Brisbane and Adelaide seen in recent years is likely to narrow, while Sydney and Melbourne should see more modest gains.”
Accessibility pressures
The new data follows an announcement that the federal government has pledged an additional $10 billion to boost housing supply for first home buyers, as part of its Mid-Year Economic and Fiscal Outlook (MYEFO) released on Wednesday (17 December).
Under the new First Home Supply Program, the Albanese government will invest $10 billion over eight years (from 2026–27) to help deliver up to 100,000 new homes reserved for first home buyers.
The funding includes $2 billion in grants and $8 billion in concessional loans, with state governments expected to contribute a further $2 billion in matched funding.
[Related: Government announces new First Home Supply program]