A buyer’s agent presents keys to a home as prices climb. Australian house prices are climbing fast – recent data show median prices jumped by about $35,000 in the September quarter, marking the fastest pace of growth in nearly four years. Lower RBA interest rates have fueled this rush, acting as a “clear catalyst” behind strong buyer demand. At the same time, new supply is failing to keep up – Australia missed its 2024-25 housing target by about 61,000 homes. In practice this means inventory is low and clearance rates are high, so well-priced homes trigger bidding wars.
Key market factors today include:
- Prices vs incomes: Home values are rising much faster than household incomes. Experts warn that housing is becoming even more unaffordable for buyers.
- Interest rates: The RBA has kept interest rates on hold, giving buyers some confidence and stability. While rates remain higher than in previous years, steady policy has encouraged many to re-enter the market. Demand is likely to stay firm as buyers adjust to the new normal.
- Supply shortfall: Building new homes is slowing. Construction targets (1.2 million homes by 2029) are off track – about 60,000 homes behind schedule. A labour shortage and longer build times mean fewer new houses are coming to market.
- Pipeline skew: Most new housing projects are for apartments and townhouses, not standalone houses. In September 2025, apartment and townhouse approvals went up by 26%, while house approvals increased by only 4%. This trend favours renters and investors, but limits the growth of family homes.
- Houses vs Units (Long Run): Over time, houses on land have outperformed units in capital gain. Historically, national data reveals houses have achieved ~8–9% growth per annum average while units have only received ~6% growth. Factors such as finite land availability, family predominantly seeking housing, and supply risks in housing favours houses over the long haul.
For buyers, this outlook means prices are still going up. KPMG forecasts house values up roughly 6% in 2026, while units also climb (albeit slightly slower). Domain Research expects record-high prices by FY26 in Sydney, Brisbane and Adelaide. In short, competition is not easing – especially as incentives (like the expanded 5% deposit scheme) draw more buyers in.
Smart Buying Strategies You Cannot Miss
As buyer’s agents, we recommend these action points for 2026:
- Prioritise houses when possible: Land and detached homes remain scarce and in demand. Remember, long-term capital growth on houses has historically outpaced units. This holds especially in family-friendly suburbs.
- Choose the right suburbs: Look for suburbs with employment, schools, transport and good yield on rental potential. Key2Dreamz can aid you in mapping your objectives to suburbs, we use current data (school zones, infrastructure developments, employment opportunities, etc.) to develop suburb potential.
- Seek off-market/pre-market deals: Many great buys never hit the open market. Our agents tap private networks to find “hidden gems”, exclusive listings only insiders know about. This first-mover advantage can save you competition and money when supply is tight.
In this tight market, a proactive buyer’s agent makes all the difference. We monitor vendor pain points and on-market trends, negotiate terms that work for you, and help with finance so you’re ready to bid. For example, we use clearance rate data and local intel to prevent overpaying or chasing ill-fitting. Ready to navigate the 2026 market? Contact Key2Dreamz today. Call +61 439 260 917 or book a free consultation. Our experienced buyer’s agents will help you strategise and move fast, whether you’re a first-home buyer or investor.