Australian Property Market Report – March 2026

National dwelling values rose 0.8% in February 2026, lifting the quarterly gain to +2.1% and accelerating the annual growth rate to 9.9%, the strongest 12-month result in over a year. A clear two-speed dynamic has emerged: regional markets (+3.2% quarterly) are outpacing combined capitals (+1.8%), while Perth, Brisbane and Adelaide continue to power ahead at record-high values as Sydney and Melbourne flatline amid affordability headwinds and rising new listings.

Key figures

Australia monthly +0.8%, quarterly +2.1%, annual +9.9%. Combined capitals monthly +0.6%, quarterly +1.8%, annual +9.6%. Combined regionals monthly +1.1%, quarterly +3.2%, annual +11.1%. National rental growth +0.7% monthly, 5.5% annually. Rental yield sits at 3.4% for combined capitals and 4.2% for combined regionals.

Capital cities, February 2026

Perth led with +2.3% monthly, +6.8% quarterly and +22.0% annual growth, a median value of $989,211, and a record high market status. Brisbane followed with +1.6% monthly, +4.8% quarterly and +17.3% annual growth to a median of $1,080,538, also a record high. Adelaide grew +1.3% monthly, +4.3% quarterly, +10.9% annual, median $922,991, record high. Darwin grew +0.2% monthly but +19.4% annually to $602,284, record high. Hobart, Canberra, Sydney and Melbourne all sit below their prior peaks, with Sydney and Melbourne essentially flat for the month (0.0%) and down slightly over the quarter (-0.1% and -0.4% respectively), though still up 6.0% and 4.7% annually.

Regional markets

Regional WA leads all regional markets with +18.6% annual growth and a quarterly gain of +5.9%, driven by mining sector momentum, extreme inventory shortages (Perth listings 48% below the 5-year average), and strong interstate migration. Regional SA is the standout improver this month, posting +5.3% over the quarter and +12.6% annually. Regional Queensland maintains strong momentum at +13.9% annually, led by the Gold Coast, Toowoomba, and resource-belt towns. Regional Tasmania is emerging strongly with +4.8% quarterly growth, its best rolling three-month performance since 2022.

Major market drivers

Growth drivers: critical inventory shortages (Perth listings 48% below the five-year average, Brisbane 31% below, Adelaide 23% below), a strong labour market reducing forced-selling risk, lower price point demand from affordability-driven migration, the Federal Government’s 5% deposit guarantee sustaining first home buyer participation, and a supply uplift in WA, SA and Queensland, though still insufficient to meet demand.

Market challenges: the February RBA rate hike eroding borrowing power, severe affordability constraints with average new mortgage sizes approaching $700k, APRA’s new 20% cap on high debt-to-income lending from 1 February, rising Sydney and Melbourne listings (9.7% and 12% above five-year averages respectively), and softening consumer sentiment over the past three months.

Rental market trends

The national Rental Value Index rose +0.7% in February, with annual rental growth reaching 5.5%, the strongest 12-month result since October 2024. Darwin leads rental growth at +8.6% annually, while Adelaide and Perth are easing slightly as the earlier rental surge moderates. Canberra recorded the weakest rental market across both houses and units. Combined capitals gross yield sits at 3.4%; after mortgage repayments, maintenance, insurance and taxes, most new investors will face a cash-flow shortfall unless purchasing in Darwin, Regional NT, or select high-yield regional locations.

Market outlook

Growth is expected to continue but remain modest and increasingly segmented, with the sharpest appreciation at the lower end of the market where competition is concentrated and policy support is most effective. Perth, Brisbane, Adelaide and Darwin are expected to maintain outperformance through the first half of 2026, supported by critically low inventory levels. Regional markets, particularly Regional WA, SA and Queensland, are expected to continue outperforming combined capitals. Key risks to watch include further RBA rate hikes amplifying affordability headwinds, or a pivot to easing later in 2026 reigniting broader momentum given low supply and improved borrowing capacity.

Data sourced from Cotality Home Value Index, index results as at 28 February 2026. This report provides general market information only and should not be considered as financial or investment advice.