<\/p>\n
Eleanor Creagh, Senior Economist, REA Future Brisbane at the Star. Friday October 17, 2025. Picture, John Gass<\/p>\n
The only way is up for home prices in 2026, with experts predicting strong growth across all major metropolitan and large regional markets in Australia.<\/p>\n
A chronic lack of supply, a boost in borrowing power from recent rate cuts and strong migration of recent years has some parts of the nation poised for a boom, with only potential rate hikes looking like slowing price growth down.<\/p>\n
The December edition of PropTrack\u2019s Home Price Index (HPI) showed annual growth in 2025 for all dwellings of 8.7 per cent.<\/p>\n
And REA Group senior economist Eleanor Creagh said a number of market conditions that has caused that growth were still in place and not likely to change materially over the next 12 months.<\/p>\n
\u201cThis year\u2019s series of interest rate cuts, population inflows, investor activity and the expanded home guarantee scheme will continue to bolster demand along with upgrade activity,\u201d Ms Creagh said.<\/p>\n
\u201cMeanwhile, stock on market has been pretty tight, despite an uplift (in November) with the spring selling surge.<\/p>\n
\u201cThe delivery of new housing remains constrained, so conditions have been tilted towards sellers and I\u2019d say that\u2019s going to remain the case.<\/p>\n
\u201cBroadly, it looks like further price gains into summer, although the extended pause on interest rates and APRA\u2019s cap on high debt to income lending is probably going to temper momentum into the first half of 2026 so we could see the pace of growth easing off slightly.\u201d<\/p>\n
One of the main factors keeping upward pressure on home prices is the dire state of construction.<\/p>\n
MORE: Named: Aus\u2019 shock new $3m suburbs exposed<\/a><\/p>\n REA Group senior economist Eleanor Creagh.<\/p>\n The latest housing figures from the Australian Bureau of Statistics revealed the number of home approvals had fallen 6.4 per cent month-on-month in October.<\/p>\n After nearly 18 months of the federal government\u2019s housing accord, which aims for 1.2 million new homes by mid-2029, we are already more than 20 per cent behind.<\/p>\n \u201cBuilding approvals, which are really the best case scenario of what gets built, are tracking well below target,\u201d Ms Creagh said. \u201cThat will continue to put a floor under home prices for sure.\u201d<\/p>\n More boom than bust<\/p>\n SQM Research released its annual Boom and Bust report in November, forecasting national home values to climb 6 to 10 per cent under a \u201cbase case\u201d scenario, in which there are one or two rate cuts in the second half of 2026, a steady but sluggish economy and inflation between 2.5 and 2.7 per cent.<\/p>\n SQM managing director Louis Christopher said 2025 had been \u201ca year of resilience\u201d for real estate, \u201cdriven by strong population inflows and initial monetary policy easing\u201d.<\/p>\n Mr Christopher noted 2026 had the potential to be a different landscape.<\/p>\n \u201cThe outlook is shaped by a range of potential economic paths, from a sluggish economy, through to sticky inflation delaying rate relief to a global slowdown; or even a robust economic rebound,\u201d he said.<\/p>\n \u201cPerth, Brisbane and Adelaide (are) poised for double digit growth in all cases due to their supply constraints and economic momentum.\u201d<\/p>\n Mr Christopher anticipates Perth and Darwin will lead growth, with as much as 12 to 16 per cent, while Brisbane and Adelaide (10 to 15 per cent) are also poised to surge if there is another rate cut by the RBA.<\/p>\n<\/p>\n