National averages lie. Australia’s housing market is no longer moving in a single direction—it’s fractured. On one side are Sydney and Melbourne, facing price softness. On the other, Perth and Brisbane continue to show resilience, holding firm against headwinds.
Big Four Forecasts: Two-Speed Market
According to ANZ’s April 2026 outlook, Sydney and Melbourne will likely record small price falls this year, weighed down by higher rates and worsened affordability. Meanwhile, Perth, Brisbane, and Adelaide are expected to post modest gains through 2026, underpinned by strong migration and historically tight listings 1.
- Sydney & Melbourne: Downward pressure on demand as the cash rate peaks at 4.35%. Prestige segments are especially feeling the heat, with five consecutive months of upper-tier declines.
- Perth & Brisbane: Limited stock, resilient employment markets, and strong interstate migration keep a firm base under values.
Westpac’s June 2026 Housing Pulse notes a looming investor pullback due to tax changes, suggesting Sydney and Melbourne corrections could deepen. However, Perth and Brisbane remain supported by structural tightness—even if price growth slows, they’re still positive for 2026 overall 2.
Why Units Are Winning Over Detached Homes
Affordability constraints have tilted demand towards medium-density housing. Units and townhouses are outperforming detached dwellings because:
- Lower entry price: Buyers are trading space for serviceability.
- Investor adaptability: Tightening negative gearing rules favour new builds, skewing demand to apartments, especially in CBD and fringe metro hubs.
Nationally, ANZ forecasts capital city price growth to slow from prior expectations of 4.8% to about 2.8% in 2026, but units are absorbing a larger share of overall transactions than detached homes 1.
Broker & Agent Strategies in a Fragmented Cycle
In this environment, location-specific advice is critical. Smart mortgage brokers and agents are:
- Scenario mapping: Stress-testing borrowing limits under a higher-for-longer rate view.
- Regional recalibration: Steering price-sensitive clients from Sydney/Melbourne into Perth and SE Queensland corridors.
- Alternative entry paths: Leveraging government schemes and exploring medium-density investments for long-term growth.
Changing Market? Perfect Time to Buy Before the Next Upswing
While consumer confidence has dipped and transaction volumes are down, buyers now hold the strongest negotiating power in years. Historically, periods of uncertainty precede market recoveries:
- Stock flexibility: Vendors in Sydney and Melbourne are more open to compromise.
- Pipeline constraints: Elevated building costs and stalled construction approvals will choke future supply, reinforcing price floors mid-term.
For patient buyers, smart acquisitions now could ride the recovery expected in early 2027 onwards.
Frequently Asked Questions (FAQs)
1. Why are Sydney and Melbourne property prices softening in 2026?
Sydney and Melbourne are highly interest rate–sensitive markets with elevated median prices. The RBA’s cash rate sitting at 4.35% and APRA’s strict serviceability buffers have reduced borrowing power significantly. This, combined with tax changes and buyer uncertainty, has led to price stagnation and small declines.
2. Why are Perth and Brisbane’s property markets holding firm?
Perth and Brisbane benefit from tight housing supply, stronger population growth, and relatively affordable housing compared to the southern capitals. These factors create a demand cushion, which is helping these markets remain resilient even as rates rise.
3. Are units performing better than houses right now?
Yes. Units and townhouses are outperforming detached houses because they offer better affordability and align with changing borrower capacity. Investors are also pivoting towards new apartment projects to take advantage of concessions available for new builds.
4. Is now a good time to buy in a softening market?
For buyers with stable finances, yes, this could be the ideal window. Negotiation power is strong, and vendors are more flexible. With building costs high and construction pipelines shrinking, supply is likely to be constrained when demand rebounds—positioning early buyers for future growth.
5. How can brokers help clients in this fragmented market?
Mortgage brokers can assist by:
- Stress-testing serviceability under current and potential higher rates.
- Re-strategising location choices, shifting focus to affordable, resilient markets like Perth or Brisbane.
- Exploring government schemes and non-bank lenders for clients needing more flexible options.
6. When will the property market recover nationally?
Major banks expect a gradual stabilisation in 2027, as inflation cools and rate cuts become more likely. Recovery will still vary by city, with Perth and SE Queensland likely rebounding earlier than the southern capitals.
