The Australian housing landscape as of March 2026

As 2026 gets underway, momentum is increasingly focused on well-located infill and higher-density housing around public transport corridors, given usage of public transport has rebounded to pre-COVID levels. While this shift is critical to improving supply in established areas, projects can be complex to deliver and require careful navigation of local character, infrastructure constraints and heightened community expectations.

Through late 2025, the New South Wales housing market recorded moderate growth. Sydney dwelling values ended the year around four per cent higher than the previous year, well below the pace of gains seen in Western Australia and Queensland. The median Sydney house price is now soaring to approximately $1.7 million, keeping the city among the least affordable globally. While stable interest rates provided a slight boost to buyer activity in the final quarter, affordability barriers continue to limit broader momentum. First home buyer participation remains subdued despite government incentives. Major regional markets such as Newcastle and Wollongong also recorded softer growth as pandemic related demand normalised.

The NSW Government introduced comprehensive planning reforms in late 2025, the most significant in nearly five decades. The Planning System Reforms Bill 2025 streamlines approvals through a centralised portal, establishes a new Housing Delivery Authority to accelerate project progression, and expands complying development pathways for medium density housing. Additional housing focused budget measures included a $1 billion Pre-sale Finance Guarantee to support an estimated 15,000 new homes, permanent land tax concessions for BtR developments, and funding for construction skills programs.

Affordable and social housing remains a key priority, with government looking to pair planning reform with targeted funding and delivery partnerships. For developers and investors, the direction of travel is towards more explicit affordable housing outcomes through project mix, approvals pathways and engagement with community housing providers alongside broader initiatives under the National Housing Accord.

Sydney’s rental market remains severely constrained, with vacancy rates sitting at roughly one per cent at the end of 2025. The median house rent is now around $800 per week and continues to rise, albeit at a slower pace. Unit rents stabilised in late 2025, suggesting affordability pressures may be tempering demand. Further tenancy reforms are under review, but no major changes came into effect in the final quarter.

New South Wales’ reforms are a necessary step to address chronic undersupply, with a clear signal toward higher-density supply in established locations and around transport corridors. Faster approvals and development pathways should help, but effective implementation and early, genuine community engagement will be critical in Sydney’s complex urban environment. 

From a delivery perspective, feasibility remains challenging. Elevated construction costs, tight contracting capacity and prolonged approval and mobilisation timeframes mean projects can take longer to get off the ground, meaning more margins are squeezed through escalation and holding costs.

Victoria has entered 2026 with subdued conditions, as buyers remain price-sensitive and activity is concentrated in more affordable segments. Melbourne’s market is still digesting 2025’s changes, and the pace of growth remains modest. Rentals are comparatively less tight than several other capitals, but affordability pressures persist.

Victoria’s housing market softened in the final quarter of 2025 after strong early year momentum. Melbourne home prices ended the year around two to three per cent higher than a year earlier, with the median house price sitting just below $1 million. Unit prices remained around $600,000. Despite population growth and improved activity earlier in the year, high borrowing costs and stretched affordability limited buyer capacity. Regional Victoria mirrored this trend, with many pandemic driven hotspots experiencing low single-digit growth or slight declines.

Victoria implemented major elements of its Housing Statement in late 2025. Key reforms included:

• Rental law overhaul: The introduction of strengthened tenant protections, a ban on no fault evictions, restrictions on rental bidding, enhanced minimum standards, and extended notice periods for rent increases.
• Supply and planning measures: A commitment to deliver 800,000 new homes over ten years, expansion of higher density zones near transport corridors, and the establishment of Homes Victoria to coordinate delivery.

The state aimed to complete an average of 80,000 homes per year - nearly double historic completion trends.

Melbourne’s rental market showed early signs of easing. Median house rents flattened at around $580 per week and recorded a slight annual decline, supported by new supply. Unit rents increased to a similar level, reflecting strong demand in the apartment sector. Vacancy rates rose modestly to around 1.5 to 1.6 per cent, providing renters with slightly more choice.

Victoria’s reform agenda is ambitious but necessary. While policy direction is clear, execution risks remain due to industry capacity constraints and construction cost pressures. 

Stronger tenancy laws will enhance stability for renters, though investor sentiment may remain cautious. It is expected that long-term delivery will require sustained collaboration, infrastructure investment, and ongoing policy refinement.

Queensland remained one of Australia’s best performing markets in 2025. Brisbane house prices increased by around nine per cent over the year, and many regional markets recorded growth of thirteen to fourteen per cent, driven by lifestyle demand and interstate migration. While momentum remained positive, signs of moderation emerged in late 2025 as buyer affordability tightened. This trend has remained consistent into the start of 2026, however we may observe changes following the recent interest rate hike.

Since the 2022 Housing Summit, Queensland has been implementing measures to improve housing availability and affordability. These include caps on rent increases, increased social housing investment, accelerated development approvals in growth corridors, and continued expansion of the $2 billion Housing Investment Fund.

Queensland’s rental market remains extremely tight. Brisbane’s vacancy rate finished 2025 at around 1.2 per cent and has tightened to 0.9 per cent as of January 2026, remaining as one of the tightest among the eastern states. Median weekly rents rose to approximately $670 for houses and $650 for units. Regional Queensland faces the highest rental stress in the country, with keyworker housing shortages emerging in several areas.

Queensland continues to benefit from strong population growth, infrastructure investment and economic momentum, supporting resilient housing demand across both metropolitan and regional markets. However, affordability pressures have intensified as price and rent growth continue to outpace income growth, particularly in Southeast Queensland.

Looking ahead, the Brisbane 2032 Olympics present a significant opportunity for coordinated housing and infrastructure outcomes. The scale of planned investment has the potential to improve connectivity, unlock well-located development precincts and support long-term productivity. 

Western Australia has entered 2026 with continued momentum, underpinned by strong population growth and tight housing availability. Rental markets remain highly competitive, reinforcing pressure on both households and employers. Buyer demand remains resilient, although the pace of price growth is showing early signs of moderation as affordability constraints intensify. 

In 2025, Perth house prices increased by approximately 13 per cent over the year. Regional Western Australia saw even stronger growth. Increasing population growth from interstate migration and overseas arrivals continue to underpin housing demand.

Western Australia has made meaningful progress in increasing supply. More than 20,000 new homes were completed in 2024, with strong momentum that continued through 2025. Easing labour and material shortages supported project completion, however construction capacity remains constrained. Competition between residential, infrastructure and resources projects is expected to place ongoing upward pressure on construction costs. 

Affordability pressures continue to intensify. Median house rents reached approximately $700 per week in December 2025, reflecting sustained demand from a growing population and limited rental supply. Rental vacancy rates fell to 0.6 per cent in January 2026 from 0.7 per cent in December 2025, remaining chronically low and well below levels consistent with a balanced market.

For the first time as of early 2026, the median house price in Perth exceeds $1 million, an increase of 9.9 per cent from the last quarter of 2025, driven by rapid growth, high demand and low supply and further constraining affordability levels as a result. Key worker housing shortages are becoming increasingly visible across metropolitan and regional markets. Government investment in social and affordable housing is significant, but supply gaps remain with a minimum of 4,000 needed annually.

Although Western Australia’s strong economic and population growth continue to drive housing demand, sustained affordability challenges pose longer-term risks to market stability and workforce attraction. Chronically low rental vacancy rates and ongoing construction cost pressures reinforce the need for targeted supply responses. Strategic delivery of diverse, well-located housing will be essential in navigating these challenges. 

South Australia recorded strong growth through 2025, being one of the higher performing housing markets nationally with annual dwelling value growing approximately five per cent for the December 2025 quarter, with growth sustained into the start of 2026. 

Over the past 12 months, Adelaide’s annual dwelling value rose beyond 10 per cent, supported by strong local demand and tight supply. Adelaide’s metropolitan median house price is now approaching $1 million, placing greater pressure on housing affordability. Regional markets also performed well, with broad-based annual increases. Growth over the next 12 months is expected to steady, with buyer and seller conditions remaining consistent.

While construction levels remain modest, incremental releases of land and targeted infill projects will begin to increase supply. The federal and state government have recently announced a partnership to deliver 17,000 new homes, along with the development of major water infrastructure in key northern growth areas. 

Supply in metropolitan areas continues to be challenging, with apartment developments prioritised for access to first home buyers. The Labour Government has allocated $500 million to provide pre-sale guarantees for new apartments to encourage new supply of apartments, if returned to government in the March 2026 election. Ongoing growth is expected in median house prices, placing further pressure around affordability.

Adelaide continues to experience an extremely tight rental market, with sub one per cent vacancy rates, driven by strong population growth. Recent data has supported slight easing in the rental vacancy rate from 0.8 per cent in November 2025 to 0.9 per cent in December 2025, but it is expected this will tighten over the coming months. Median weekly rental prices in Adelaide remains at $600, where strong demand and supply constraints are expected to increase this figure.

The South Australian housing market over the past 12 months has been defined by undersupply and demand resilience, rather than speculative excess. Fundamental imbalances between supply and demand are likely to persist, continuing to place upward pressure on both housing and rental prices in the absence of a material increase in housing delivery.

Government supply initiatives are extremely important to new market entrants, particularly first home buyers and to support affordability and cost of living pressures.